Four reasons why Ethereum (ETH) should not be considered a security:
Although the U.S. Securities and Exchange Commission (SEC) is considering classifying Ethereum as a security, the following four reasons support Ethereum's non-security status:
Historical decision:
1. In 2018, the SEC has made it clear that Ethereum is not a security. This historical position provides strong support for Ethereum's non-security status.
CFTC's commodity classification:
2. Another U.S. regulator, the CFTC, believes that Ethereum is a commodity. This classification supports the distinction between Ethereum and securities, emphasizing the difference in its market roles and functions.
Decentralized characteristics:
3. Ethereum is a decentralized platform with all information open and transparent. This is different from the model where securities are managed by central entities, which often take advantage of information asymmetry. Ethereum's decentralized nature is consistent with the principles of the SEC's decision in 2018.
Consensus mechanism transformation does not affect classification:
4. Ethereum's transition from proof of work (PoW) to proof of stake (PoS) is a reflection of its technological advancement, aimed at improving efficiency and sustainability. This change does not change the decentralized nature of Ethereum, nor does it introduce typical elements of securities.
Ethereum's historical regulatory treatment, the CFTC's commodity classification, its decentralized nature, and the irrelevance of consensus mechanism shifts all support the view that Ethereum should not be considered a security.
