Bitcoin as one of their methods of raising funds thru ICO may not attract the attention of regulators, but Ethereum may be more interesting to US regulators and is recognized as a security, The Wall Street Journal reports.
According to the publication, at present, the US federal financial regulators conduct an analysis of the assets based on Ethereum. Using a number of criteria, they are trying to establish whether the creators of digital currencies have a significant impact on their price, as is the case with stock exchanges. The price of the latter largely depends on the strategy implemented by the company that issued them.
The Commodity Futures Trading Commission of the United States (CFTC) currently considers bitcoin an exchange commodity, which formally exempts it from oversight by the Securities and Exchange Commission (SEC), but in the case of Ethereum, the situation is slightly different.
So some regulators not only believe that Ethereum is "in the gray zone", but also can consider that the creation of this cryptocurrency in 2014 could be carried out in violation of the laws on the distribution of securities.
Under US law, companies involved in the issue of securities or bonds are required to register with the SEC and comply with all the requirements for disclosure of information about the owners of the company, or to restrict access to the sale of their securities. In the latter case, distribution of shares is possible only among accredited investors.
In 2014, when Ethereum was created, none of these conditions was met.
It is also alleged that financial regulators are eyeing the activities of "certain persons" who could influence the development of the network. So, in the sphere of their attention were representatives of the Ethereum Foundation. Formally, this non-profit organization is responsible for the development of the network, but, as regulators believe, its representatives can influence the price of the crypto currency. For example, the Ethereum Foundation pays bounty for detecting bugs and vulnerabilities.
Ethereum Foundation collected more than 31,000 BTC or $ 18.3 million in July 2014, selling about 60 million ETH. At that time, the fund attracted money to develop a software platform, and investors could buy the asset, expecting it to grow in value. Therefore, this process resembles the sale of securities, the WSJ source says.
In addition, regulators are studying other factors that are important for ETH pricing. For example - how actively cryptocurrency is used in the work of decentralized applications created on the Ethereum blockchain.