SEC Chair Leaves Ether’s Regulatory Status Hanging in the Balance

Divya  |  Aug 4, 2021

Ether’s regulatory status is yet to be clarified by the Securities and Exchange Commission (SEC) chair Gary Gensler, who sidestepped questions about the currency on Tuesday. Gensler has repeatedly referred to Bitcoin as a commodity in the past. However, in 2018, the former Obama administration official stated that there’s a “strong case” that Ethereum and XRP are non-compliant securities.

SEC Chair Gary Gensler Refuses to Comment on Ether’s Regulatory Status

During a speech at the Aspen Institute, Gensler talked about a wide variety of issues related to digital assets, while hinting at potential regulations. But he refused to comment on Ethereum’s regulatory status and its future.

Nevertheless, the hints dropped by Gensler until now suggest that Ether may eventually be categorized as a security. The SEC chair also agrees with his predecessor Jay Clayton, who stated that every initial coin offering (ICO) is a security.

The securities regulator has sent out uneven messages on Ethereum’s status over the years. In 2018, former SEC director William Hinman stirred up the hornet’s nest when he declared Ether was not a security despite its launch as an ICO. Hinman exited the agency shortly after he made the declaration.

Gensler Concerned About Decentralized Finance (DeFi)

In an interview with Bloomberg, Gensler expressed his concerns about the burgeoning decentralized finance (DeFi) market. He was specifically focused on investor protection, which he felt was insufficiently addressed due to “significant gaps” in the industry. The SEC boss also said that the agency could use additional people to deal with crypto regulations.

As for the ETF applications piling before the agency, Gensler said that he was willing to look into Bitcoin-based funds. 

DeFi Industry Attracts 2.91 Million Unique Ethereum Addresses

While the SEC is still mulling over a regulatory framework for DeFi, the sector continues to record stunning gains with Ethereum’s support. According to a new DeFi report by ConsenSys, some 2.91 million unique Ethereum addresses were engaged with a DeFi protocol by the end of June 2021. The figure reflected a 65% growth in engagement since the last quarter.

ConsenSys added that this estimate may not represent the users perfectly because people tend to create multiple accounts through non-custodial wallets such as MetaMask.

Be that as it may, MetaMask has also emerged as an important indicator for analyzing DeFi trends. As per the data shared by ConsenSys, MetaMask had more than 7.3 million monthly active users at the beginning of June. As of press time, the total count of monthly active users stood at 8.5 million. The report stated that “this is in part due to the growth of DeFi applications on other Ethereum Virtual Machine compatible networks that users can access via MetaMask, like BSC and Polygon.”

Predictably, DeFi’s rising popularity has led to a significant increase in the number of Ethereum addresses. The network started the year with 131 million unique addresses. This count currently stands at 165 million, according to information provided by analytics platform Etherscan.

 

 

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