Bloomberg Analyst Says SEC Has Dismissed Ethereum as Security

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The debate around Ethereum’s classification under U.S. securities laws has lingered for years. Notably, the SEC has taken legal action against various crypto projects for issuing tokens allegedly classified as securities. However, Ethereum and its native asset, ETH, have remained notably untouched by the regulatory agency. 

SEC’s Implicit View on Ethereum

Bloomberg’s ETF analyst, James Seyffart, contends that the SEC’s actions—or lack thereof—indicate a divergence in how it views ETH. In his analysis, Seyffart suggests that the SEC implicitly acknowledges Ethereum as a commodity rather than a security. He points to the approval of Ethereum futures ETFs as a sign within the SEC’s jurisdiction favoring this view.

He further predicts that any reversal by the SEC on Ethereum’s status would result in the delisting of approved Ethereum futures contracts. Such a move would not only challenge the crypto industry but also pit the SEC against its sister agency, the CFTC, which oversees futures contracts.

It is worth noting that SEC Chair Gary Gensler has implicitly categorized both Bitcoin and Ethereum as commodities rather than securities. But Seyffart forecasts Gensler to publicly label Bitcoin as a commodity in 2024 while remaining silent on Ethereum’s status, further cementing its position as a non-security asset. 

Seyffart believes that declaring Ethereum security isn’t a priority for the SEC at this juncture, suggesting that Gensler might opt to label other crypto assets as securities instead. This classification carries significant regulatory implications, as securities necessitate stringent registrations and financial disclosures with the SEC, unlike commodities that fall outside its regulatory scope.

Gensler’s Position and Industry Reactions

Despite Gensler’s stance advocating for most crypto projects issuing tokens to be considered securities under SEC jurisdiction, the crypto industry is actively challenging this narrative. Ongoing lawsuits involving Ripple and Coinbase highlight the industry’s vigorous defense of its position on crypto assets’ classification as securities or commodities.