Ethereum happens to be the second largest cryptocurrency platform in the world behind Bitcoin. Developed and launched in 2014 by Vitalik Buterin, this exchange has gained enough popularity as one of the best platforms that provide developers' the opportunity to create and launch decentralized applications on a secure and free from interference platform. Ethereum allows users to run decentralized applications and smart contracts on its network and it happens to have the most stable blockchain amongst all crypto platforms. This exchange is undergoing a current inquiry. This inquiry by the Security and Exchange Committee of the United State and the Future Exchange Commission is based on the fact the platform should be classed as a security.
Image Source : https://pixabay.com
As penned down on the Security Act of 1993, these regulatory bodies are taking a careful and closer look at the network to see if it should be classed as a security or not. The main issue that gave rise to this inquiry is the pre-sale that was carried out by the platform in 2014 when it was first launched. The pre-sale saw about 31,000 BTC tokens being raised by the platform to fund its activities. These regulatory bodies are of the opinion that the platform should be immediately classed as a security, to further buttress their point, they are of the opinion that most if not all investors that purchased Ether tokens bought them because they were secretly hoping the value of the token would rise in the future. According to this Security and Exchange Committee, based on the Security Act of 1993, this platform should have been classed as a security prior to the pre-sale. They are of the opinion that if these investors bought the Ether token because they felt that the value or price of the token would rise anytime in the future, then the platform should have been identified as a securities and before and after the pre-sale. The Security and Exchange Committee and the Future Exchange Commission has set aside Monday, May 7th as the day to discuss the course of action they are to take against the platform.
While speaking to a group of reporters at the beginning of the month of May, the Co-founder of the Ethereum Foundation Lubin Joseph stated that they (Ethereum developers) have spent an unimaginable amount of time with dozens of lawyers in not just the United States but also in other countries, that they are comfortable and sure that the platform is not a security, never has it been and never will it be. He went further to mention that the regulatory bodies that matter know this. He also said that the exchange should and can not be regulated because it has never been a security rather it is a decentralized cryptocurrency platform that eliminates all third-party interference from all transactions and activities that are carried out on the network.
We can do nothing but wait until the end of the day to know what the regulatory bodies have discussed.