In a recent interview with CNBC, Jay Clayton, the former Chairman of the US Securities and Exchange Commission (SEC), argued that the courts are not an appropriate forum to determine whether crypto assets should be considered securities or not.
He noted that any security today may not be considered as such tomorrow and that the courts are not well-equipped to deal with disputes regarding security classifications.
Clayton suggested that the Howey test, which examines how a crypto asset is sold, is a better way to determine whether a particular asset should be classified as a security.
Clayton went on to express his personal opinion that the current offerings and sales of ether (ETH) are not securities transactions.
He used the example of Broadway tickets to illustrate his point, explaining that tickets received for investment in a play that has yet to be staged would be considered securities, while tickets purchased later to see an already finished show would not be.
While Clayton agreed with Gary Gensler, the current Chairman of the SEC, that securities can cover a wide range of cryptocurrencies, he argued that the sale of ether has more indications of being a ticket rather than a fundraiser and a security.
Gensler, on the other hand, has hinted that ether may face increased attention from regulators.
With the ongoing debate over whether crypto assets should be classified as securities or not, it remains to be seen how regulators will approach the issue in the future.