MicroStrategy CEO Michael Saylor has drummed a lot of support for Ethereum amidst the recent market chaos, branding the digital asset as a good form of security. He stated that at a recent interview where he was asked to give his opinion on Ethereum and the leading digital asset, Bitcoin.
Based on the widespread claim, several investors and traders have noted that Bitcoin and Ethereum are commodities. Some employees of CFTC and the SEC had branded the assets as commodities in the past few weeks.
MicroStrategy CEO Explains His Classification
In his statement, the MicroStrategy CEO said that one of the few reasons he thinks that Ethereum is a security is since it was introduced into the crypto market through an initial coin offering (ICO). Apart from that, the token has a pre-mine, a team that oversees its activities, and a hard fork was conducted. Saylor also noted that over the years, there had been other hard forks that have been conducted.
He mentioned that if it were a commodity, there might be no firm issuing the token, meaning that nobody is making all the major decisions. He noted that a majority of the tokens in the market had done many hard forks over the year, which has made them change protocols. It means that there is an entity that is now controlling the affairs of the networks.
Former SEC Director Says ETH And BTC Are Not Securities
In 2018, during a conference, the then finance director at SEC commented to the media that the Agency was planning to use something known as the ‘Howey Test’ to categorize tokens that are securities from the ones that are commodities.
At that time, the said director, William Hinman, said that they would start from Ethereum and Bitcoin while projecting that none of them could fall into the securities category. Furthermore, Hinman mentioned that Bitcoin does not have a third party working on the digital asset since its inception.
Hinman noted that Bitcoin had been decentralized since the start, which is one of the reasons why the network has not stopped functioning. The director also stated that apart from the fundraiser done when Ethereum was created, every other function it possesses now points to the asset being decentralized.
He also noted that the current methods of purchasing Ethereum do not portray an asset that is a security.