The three-dimensional structure of chromatin is determined by the action of protein complexes of the structural maintenance of chromosome (SMC) family. Eukaryotic cells contain three SMC complexes, cohesin, condensin, and a complex of Smc5 and Smc6. Initially, cohesin was linked to sister chromatid cohesion, the process that ensures the fidelity of chromosome segregation in mitosis. In recent years, a second function in the organization of interphase chromatin into topologically associated domains has been determined, and loop extrusion has emerged as the leading mechanism of this process. Interestingly, fundamental mechanistic differences exist between mitotic tethering and loop extrusion. As distinct molecular switches that aim to suppress loop extrusion in different biological contexts have been identified, we hypothesize here that loop extrusion is the default biochemical activity of cohesin and that its suppression shifts cohesin into a tethering mode. With this model, we aim to provide an explanation for how loop extrusion and tethering can coexist in a single cohesin complex and also apply it to the other eukaryotic SMC complexes, describing both similarities and differences between them. Finally, we present model-derived molecular predictions that can be tested experimentally, thus offering a new perspective on the mechanisms by which SMC complexes shape the higher-order structure of chromatin.