7. What coins are or aren’t considered a security?
The short answer is that beyond the very biggest cryptocurrency there’s a lot of ambiguity. US regulators including the SEC agree that Bitcoin, which is by far the largest digital asset, isn’t a security. It was started by an unknown person or persons going by the pseudonym Satoshi Nakamoto and does not exist as a way to raise money for a specific project. The second-biggest token, Ether, was deemed not to be a security during the Trump administration by a senior SEC official who signaled that while Ether may have started out qualifying as a security — the Ethereum Foundation used it to raise money — it had grown into something sufficiently decentralized that it probably no longer was one. But after Ethereum changed to a system in which coins that are “staked” play a role in recording transactions, Gensler said that the fact that staked coins can earn interest might lead regulators to start treating it as a security. The CFTC deems Ether a commodity, and the CME lists futures on it as well as Bitcoin.
Source: Why the Crypto World Flinches When the SEC Calls Coins Securities – The Washington Post
