Chamath Palihapitiya Says Bitcoin Has to Be Regulated Like Security

During a recent podcast appearance, Chamath Palihapitiya, a Sri Lankan-born Canadian and American venture capitalist, has opined that Bitcoin has to be regulated as a security despite the fact that it most likely is not one, Business Insider reports.

The sheer size of the cryptocurrency market makes it necessary, according to Palihapitiya. There is a huge amount of "system risk" around the largest cryptocurrency due to the lack of regulation. After jumping on the crypto train as early as in 2013, the billionaire is now concerned about the future of Bitcoin.

During a recent appearance on CNBC's Squawk Box, U.S. Securities and Exchange Commission Chair Gary Gensler reaffirmed that Bitcoin is actually a commodity. However, he was mum about other cryptocurrencies after previously claiming that the vast majority of tokens were unregistered securities.

At the same time, the regulatory status of Ethereum remains a burning question. Earlier this month, MicroStrategy CEO Michael Saylor proclaimed that Ethereum was "obviously" a security since it was issued via an initial coin offering (ICO) with a management team. SEC Chair Gary Gensler has repeatedly dodged questions about whether or not the Ether token is an unregistered security.

As reported by U.Today, a new lawsuit is alleging that Solana, one of the top Ethereum competitors, was filed in California last week.

The outcome of the ongoing Ripple v. SEC battle will likely have major implications for the industry. In its bombshell lawsuit, the agency alleges that XRP token is an unregistered security that was illegally sold by the defendants.