SEC's approval of $ETH ETFs still leaves some questions on whether ETH is a security, lawyers say
The U.S. Securities and Exchange Commission's approval of spot Ethereum (ETH) products left some this past week wondering: is ether a commodity now? That answer is still unclear.
Whether the SEC has jurisdiction over ether has been hazy. The agency's Chair Gary Gensler has not explicitly said ether is a security. However, Consensys alleged that the agency has considered ether to be a security, in a complaint the crypto firm lodged against the agency last month.
Meanwhile, at the SEC's sister agency, Commodity Futures Trading Commission Chair Rostin Behnam has asserted that ether is a commodity.
This comes as the SEC approved 19b-4 forms for eight Ethereum ETFs on Thursday, though issuers would need to have their S-1 registration statements go effective before trading can begin. Legal sources have differing views on whether the SEC's approval of Ethereum ETFs means that anything has changed.
"I do think this is a watershed moment in the long-running debate about ETH's status," Coinbase's Chief Legal Officer Paul Grewal said in an interview with The Block on Friday. "For too long a time, the SEC has played hide the ball on its position as to whether or not eth is a security, a non-security, a commodity or something else altogether."
Grewal asserted that since issuers used the form S-1, a certain percentage of assets in the fund can be securities.
"By designating the S-1 as the registration of choice, what the SEC is saying is that these funds, by definition, do not include assets that have more than 40% of their portfolio in securities," Grewal said.
"There's no way to square that with any other conclusion than eth is not a security," Grewal added.
Photo: Kanchanara on Unsplash
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