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Ethereum's Classification Debated By USA Regulators

According to a recent article in The Wall Street Journal, today there will be a meeting between two behemoth regulators, the Securities and Exchange Commission and the Commodity Futures Trading Commission, that will discuss the classification of Ethereum. Whether it is a currency, a commodity, a security or something else. This decision about the classification of the coin will have enormous consequences over the market, at least in what regards to USA exchanges.
Albeit not knowing exactly what is going to happen, we have several clues ahead of this meeting. Gary Gensler, former head of the CFTC has already touched this subject before and has said that due to their characteristics Ripple and Ethereum might be classified as securities. But, for the sake of argument, what is a security? According to Investopedia, a security is “a fungible, negotiable financial instrument that holds some type of monetary value. It represents an ownership position in a publicly-traded corporation (via stock), a creditor relationship with a governmental body or a corporation (represented by owning that entity’s bond), or rights to ownership as represented by an option”.
According to this definition, some may conclude that Ethereum is indeed a security it can be interpreted as an investment contract. The problem with this approach is that Ethereum is so decentralized right now that the considerations that could be applied at its start may not apply now. In a way, Ripple could be considered more a security than Ethereum.
Regardless of the decision taken, as we said before, this will affect the markets in a big way. If Ethereum is indeed classified as a security, the first consequence will be that almost all USA exchanges will be forced to delist Ethereum trading pairs, affecting exchange volumes. This because to trade securities the will have to be registered exchanges and to get that certification it will take a while. Second, the market price of the cryptocurrency will surely take a hit. This will set a great precedent for the cryptocurrency industry, and all the world will be watching closely.

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