It has been reporetd that there are massive efforts made in order to classify Ethereum as a security. Check out the latest reports and important opinions on why this should not happen.
SEC vs Ethereum
According to recent articles from CoinDesk and Fortune, the U.S. Securities and Exchange Commission is reportedly getting ready to categorize ether (ETH), the native cryptocurrency of the second-largest blockchain platform, Ethereum, as a security.
This decision is expected to have significant effects on the entire crypto industry, including the possible cancellation of plans for a spot ETH exchange-traded fund.
Fortune has reported that the SEC has issued subpoenas to multiple US companies, requesting documents related to their interactions with the Ethereum Foundation.
The Ethereum Foundation is a non-profit organization based in Switzerland and was responsible for launching the Ethereum blockchain.
The SEC’s investigation is said to have begun after the Merge event, which took place in 2022 and introduced ether staking. The sources cited by Fortune remain anonymous.
After Ethereum’s proof-of-stake upgrade, the Chairman of the United States Securities and Exchange Commission, Gary Gensler, stated that proof-of-stake chains, which reward users with tokens for locking up their coins as a security model, could be considered investment contracts and classified as securities. He did not mention Ethereum specifically.
However, he has filed lawsuits against various crypto exchanges, such as Coinbase, Kraken, and Binance, alleging that they were selling securities to U.S. investors without proper registration. These securities include assets like Cardano’s ADA and Solana’s SOL.
According to crypto attorney Ignacio Ferrer-Bonsoms, despite never being named outright as a security in an SEC enforcement action, Ethereum’s classification as a non-security strikes him as contradictory.
In a recent blog post, Ferrer-Bonsoms compared Ethereum to Cardano to argue that if the SEC considers one to be in violation of securities laws, then it must consider the other in the same way.
CoinDesk notes:
“That said, not everyone agrees that Ethereum is a security. Most importantly, the Commodities Futures Trading Commission (CFTC), the SEC’s smaller sister agency, has for years allowed ETH futures trading, implying that it is a commodity. And, in the CFTC’s lawsuit against Sam Bankman-Fried, the agency outright said ETH is a commodity (alongside BTC and (USDT).”