(Bloomberg) -- Gary Gensler, former chairman of the U.S. Commodity Futures Trading Commission, said that most cryptocurrencies sold through initial coin offerings should be considered securities.
A classification by the U.S. Securities and Exchange Commission would subject the coins and exchanges offering them to greater scrutiny.
Gensler made the comments during the Institutional Crypto: Laying the Foundation conference in New York. The gathering is sponsored in part by Bloomberg LP, the parent company of Bloomberg News.
One of the ways regulators determine whether an asset is a security is with the so-called Howey Test. For Gensler, coins such as Ether would have initially met the requirements of the test as there's an investment of money in a common enterprise, and the expectation of profit which comes from the efforts of a third party. Ether has since become decentralized, he said.
To contact the reporter on this story: Dave Liedtka in New York at dliedtka@bloomberg.net
To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka, Andrew Dunn
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