Ethereum Foundation Advisor: SEC Lacks Fundamental Understanding of Core Nature of Crypto

William Mougayar, author of "The Business Blockchain" and advisor to the Ethereum Foundation, said in an interview with CNBC May 18, that regulators lack a foundational understanding of cryptocurrencies.

"The SEC is still trying to educate themselves, not just educate the public Right now they are still grappling with it and for them the box that they play in is that they see all these cryptocurrencies as a security. But in reality not everything is a security. They want everything to play in that box."

"Exactly. That's their box, the box they play in. They see everything as a security and they are trying to fit a square peg into a round hole, but not everything is a security right now."

Regarding Twitter CEO Jack Dorsey's recent statement that Bitcoin will be the native currency of the Internet, Mougayar said that he considers BTC one of the native currencies, but "It's not going to be the only one, there will be others."

"What's important is not just the technology itself - it's who is using it."

Mougayar further explained that currently, cryptocurrencies are underused in their capacity as utilities with real use cases, where they would serve a real purpose and not merely be speculatory instruments.

He pointed out that 53 percent of Ethereum transactions are on smart contracts.

According to Mougayar this shows that it is "Not just as a currency, [but] a utility."

Recently, the Office of Investor Education and Advocacy at the SEC launched a fake initial coin offering website, the goal of which is to increase awareness of the typical warning signs of scam ICOs and to promote investor education.

According to the SEC Chairman Jay Clayton, the regulator supports the adoption of new technologies, but it also encourages investors to educate themselves and understand what fraudulent offers look like.