Amidst the raging debate on Ethereum’s classification, BTC proponent, and current CEO of Block Jack Dorsey stunned everyone when he claimed the leading crypto as a security.
However, his comment was not taken lightly. Udi Wertheimer, Bitcoin Ordinals developer at Taproot Wizards called Dorsey a “clown” in a tweet on June 6.
Dorsey then shot back at Wertheimer asking “ETH is not a security? Teach me wizard,” who then responded with a five-year-old clip of the United States Securities Exchange Commission Chair Gary Gensler stating then ETH was “sufficiently decentralized” and wasn’t a security.
The remakes come in the wake of SEC complaints against two of the biggest cryptocurrency exchanges. On June 5 and 6, Binance and Coinbase were sued for allegedly marketing tokens that were unregistered securities.
The largest cryptocurrency by market capitalization, Bitcoin [BTC], dropped below $26,000 for the first time in more than two months.
Dorsey a big-time Bitcoin advocate also tweeted in support of a tweet by Coinbase CEO Brian Armstrong in 2015, where he referred to altcoins as a “distraction” and that Coinbase should instead “be focused” on Bitcoin.
Ethereum, also known as Ether, the second-largest crypto, reacted by falling 3.4 percent to $1,812.2 at the most recent count, with a market capitalization of over $218.1 billion. In the most recent 24 hours, approximately $9.1 billion worth of Ether was traded.
The tokens included in the lawsuit as unregistered securities, including Binance’s BNB, Solana [SOL], and Cardano [ADA], were at the forefront of the decline. These top altcoins saw daily losses of up to 10%.
It’s noteworthy that Ethereum was excluded from the list. Gary Gensler, chairman of the SEC, has repeatedly declined to say definitively whether Ethereum is considered securities.
Ethereum Could Still Pass Howey…
Whether ETH is security has been a matter of debate that depends on whether its promoters have passed the four prongs of the US Supreme Court’s Howey Test.
Although it’s possible that Ethereum’s ICO passes the Howey Test, the time restriction for filing an SEC action relating to events from 2014 has gone by.
However, given its current proof-of-stake return and a number of other financial features, ETH might be able to pass the Howey Test. This issue would only be resolved by the outcome of the SEC action in a US court.