Categories: Crypto NewsNews

Ethereum is ‘obviously’ a security- Michael Saylor

Published by
Nonhlanhla P Dube

The CEO of MicroStrategy said that ETH is a security because it was issued through an ICO and its network has undergone numerous fundamental modifications over the years. Michael Saylor, CEO of MicroStrategy and a Bitcoin (BTC) bull, stated that Ethereum (ETH) is ‘obviously’ a security, as he reiterated that BTC is the only commodity in the crypto sector.

In an interview with Altcoin Daily, Saylor was asked about his thoughts on the classification of both BTC and ETH as commodities by U.S. Senators Kirsten Gillibrand and Cynthia Lummis, as well as officials from the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC).

Saylor offered a detailed breakdown of the basic distinctions between the Bitcoin and Ethereum networks, claiming that only the former has stayed constant over the years:

“I think Ethereum is a security, I think it’s pretty obvious, […] it was issued by an ICO, there’s a management team, there was a pre-mine, there’s a hard fork, there’s continual hard forks, there’s a difficulty bomb that keeps getting pushed back.”

The CEO contended that the ongoing requirement for software upgrades on a network controlled by a team or entity indicates that ETH is a security. As an example, he cited the design of the long-delayed difficulty bomb, which he claims will “murder” the entire ETH mining industry.

According to Saylor, a digital asset must be supported by a “completely decentralized protocol that nobody can change even if they wanted to change it” in order to be recognized as a commodity.

 “For it to be a commodity there can’t be an issuer, and the truth is you can’t really make decisions. I mean one of the fundamental insights in the crypto industry is that the fact that you can change it, is what makes it a security,”he explained.

Securities are fungible and tradable financial instruments used to raise funds in either public or private markets. Commodities are defined as items or assets with monetary utility. Gold and silver are considered hard commodities, but rice and tea are considered soft commodities.

Saylor repeated that BTC is a commodity because the core of the Bitcoin network, like the physical makeup of gold, cannot be changed:

“If you want to establish yourself as a digital commodity, then you’re trying to create something like gold in cyberspace.”

Despite Saylor’s claims, the Bitcoin network has undergone numerous network upgrades throughout the years. The most famous recent one was the November 2021 Taproot soft fork, which attempted to increase Bitcoin’s scripting capabilities and anonymity.

When asked about other cryptocurrencies, like as Cardano’s native token ADA, Saylor reiterated his maximalist stance, stating

“I think all of the proof-of-stake networks are securities and they’re all very risky […] it’s above my pay grade, the regulators will decide whether or not they allow them to continue or whether they don’t allow them to continue.”

According to MicroStrategy, one of the main reasons he prefers BTC over all other crypto assets is that he is concerned about altcoins being non-compliant security tokens that could be regulated out of existence.

Saylor’s MicroStrategy has continued to acquire BTC despite the asset’s plummeting value in 2022, and as of June 29, the firm possessed 129,699 BTC valued at approximately R66.9 billion at the time.

Share
Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at nonhlanhla@rateweb.co.za

Published by
Nonhlanhla P Dube
%%footer%%