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The CEO of MicroStrategy stated that ETH is a security since it was issued through an ICO, and its network has undergone significant modifications over time.
Michael Saylor, CEO of MicroStrategy and Bitcoin (BTC) bull, stated that Ethereum (ETH) is 'clearly' a security while reiterating that BTC is the only commodity in the crypto industry.
In an interview with Altcoin Daily, Saylor was asked his opinion on the designation of BTC and ETH as commodities by U.S. Senators Kirsten Gillibrand and Cynthia Lummis, as well as Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) officials (CFTC).
Saylor explained the underlying distinctions between the Bitcoin and Ethereum networks, claiming that only the Bitcoin network has stayed constant throughout time.
“I think Ethereum is a security, I think it’s pretty obvious, […] it was issued by an ICO, theres a management team, there was a pre-mine, there’s a hard fork, there’s continual hard forks, there’s a difficulty bomb that keeps getting pushed back.”
The CEO said that the ongoing requirement for software updates on a network managed by a team or entity proves that ETH is a security. For example, he cited the design of the long-delayed difficulty bomb, which he said would “kill” the whole ETH mining sector.
According to Saylor, for a digital asset to be recognized as a commodity, it must be supported by a “fully decentralized system that can’t be altered even if someone tried to.”
“For it to be a commodity there can’t be an issuer, and the truth is you can’t really make decisions. I mean one of the fundamental insights in the crypto industry is that the fact that you can change it, is what makes it a security,” he explained.
In general, securities are fungible and marketable financial instruments used to raise cash on public or private markets. While commodities are considered to be things or assets with a monetary value. Gold and silver are hard commodities, but rice and tea are soft commodities.
Saylor repeated that Bitcoin is a commodity since the core of the Bitcoin network cannot be altered, similar to gold’s physical composition.
“If you want to establish yourself as a digital commodity, then you’re trying to create something like gold in cyberspace.”
Regardless of Saylor’s reasoning, the Bitcoin network has undergone several network improvements throughout the years. The most noteworthy in recent history was the November 2021 Taproot soft fork, which attempted to enhance Bitcoin’s scripting capabilities and anonymity.
Saylor reiterated his maximalist stance when asked about other alternative cryptocurrencies, like Cardano’s native currency ADA.
“I think all of the proof-of-stake networks are securities, and they’re all very risky […] it’s above my pay grade, the regulators will decide whether or not they allow them to continue or nor they don’t allow them to continue.”
MicroStrategy explained that one of the primary reasons he likes BTC above all other crypto assets is his worry that altcoins might be legislated out of existence for being non-compliant security tokens.
Saylor’s MicroStrategy continued to acquire BTC despite its plummeting value in 2022; as of June 29, the company possessed 129,699 BTC valued at around $3.98 billion.
