This is the question Ranking Member of the Securities and Exchange Oversight Commission, Patrick McHenry, asked the Chairman of the Securities and Exchange Commission (SEC), Gary Gensler, numerous times without getting a clear answer. Not getting an answer to that question means it remains unclear as to what legislation cryptocurrencies like Ether, the second largest in market cap, are subject to.
The problem, however, highlights a fundamental fallacy in American governance. First, we blindly let innovation, by default deemed holier than thou, rule the new roost of finance. We have learned nothing from our laissez-faire technology indulgence previously having demonstrated to produce many technological false positives from which we yet have to recover.
Does social media truly support the foundational principles of free speech a self-respecting sovereignty aspires to? Does the transparency of open-source development, generally perceived as positive, not leave massive gaping holes in the security of our mission-critical systems we would rather keep under wraps?
How in the world do you envision a monism of absolutism deployed by our current technology algorithms to encircle a world of pluralism and relativity? These are all foundational questions left unanswered by Congress not looking to govern further than its nose is long.
Back to crypto, the role of Congress is to come up with the theory and systems upon which a governing body can rule. Hence, the question posed by McHenry should be directed to Congress, not to the SEC. Congress must decide whether the system of crypto fits the theory, in the words of Albert Einstein, that determines what humanity can discover.
Trust in a currency is discriminate as evolutionary merit is discriminate. Hence, any currency, digital or otherwise, that assigns indiscriminate trust to money deploys a theory incompatible with human evolution. Crypto should, therefore, not be regulated but banned, as it proves to support indiscriminate merit to humanity.
Without a theory of humanity that determines what humanity can discover, our current legislation is as foolish as any absolutism of truth promulgated by previous empires have been. We must inspire the world with new rigors of excellence we first and successfully apply to ourselves. Those rigors include defining our first-ever theory for humanity from which the proper systems and regulations can be derived to improve human adaptability to nature’s entropy.
Anything else is hogwash and not worthy of watching a debate about.