- Attorney Jeremy Hogan has recently highlighted the ambiguity of the SEC’s stance on Ethereum as a security.
- Although Gary Gensler has stated that US securities laws are very clear, the status of ETH remains uncertain.
- CFTC Commissioner cleared up that Ethereum falls under the jurisdiction of his agency and that it is not a security.
In light of the recent developments in the United States Securities & Exchange Commission (SEC) v. Ripple Labs court case, attorney Jeremy Hogan brought attention to the legal status of Ethereum. Hogan asked SEC Chair Gary Gensler whether Ethereum was a security, while the Commodities & Futures Trading Commission (CFTC) Commissioner Brian Quintenz also gave a statement regarding ETH.
Ether is under CFTC jurisdiction
Attorney Hogan asked the head of the SEC whether Ether, the underlying asset of the Ethereum blockchain, was a security pertaining to the Ripple case. The lawyer stated that Gensler previously said that the US securities laws are very clear, but there seems to be cloudiness around the status of ETH.
Gensler has had extensive experience on Wall Street, with government regulation and with teaching about cryptocurrencies at MIT. The crypto community believed that his appointment as the SEC Chair would be good news for the industry.
The digital asset industry has struggled around regulatory frameworks, and the former head of the SEC, Jay Clayton, had been known to justify his actions against cryptocurrency proposals.
Hogan added that Gensler is highly informed about Ethereum, given his background. Therefore, the attorney asked for a clear answer regarding the status of Ether. The SEC Chair previously said that XRP and Ether could be classified as non-compliant securities.
CFTC Commissioner Quintenz said that the SEC and his agency bothshare responsibility for the regulation of futures contracts on securities.
The Commissioner clarified that there is currently a futures contract on Ether. Therefore, it is only “under the CFTC’s purview, which makes ETH a non-security commodity.”
Ethereum price stabilizes ahead of big move
Ethereum price continues to tread within an ascending parallel channel pattern, forming higher highs and higher lows. The governing chart pattern suggests that although ETH has not broken out of the trend yet, it could head toward $3,800.
The prevailing chart pattern indicates that a swing above the upper boundary of the parallel channel could put a 16% surge on the radar. However, before this bullish target can materialize, Ethereum price has a few hurdles to tackle.
The first obstacle for ETH is at the 61.8% Fibonacci extension level at $3,352, then the topside trend line of the chart pattern at $3,401.
ETH/USDT 4-hour chart
Should selling pressure increase leading to a reversal of fortune, Ethereum price would discover meaningful support at the 20 four-hour Simple Moving Average (SMA) at $3,227, coinciding with the middle boundary of the chart pattern.
Further lines of defense will emerge at the 50 four-hour SMA at $3,164, then the lower trend line of the parallel channel at $3,062.
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FAQs
ETHEREUM SURVIVES THE SEC. Today we're happy to announce a major win for Ethereum developers, technology providers, and industry participants: the Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0.
Is ETH a commodity CFTC? ›
The head of the US commodities regulator, Rostin Behnam, has again argued that the agency should be given regulatory oversight of Bitcoin and Ethereum to better protect investors.
Is Ethereum a security or a commodity? ›
Ethereum Is Not a Security
Consensys further confirmed that the decision came after the US-based blockchain firm sent a letter to the regulator on June 7 asking to “confirm that the May ETH ETF approvals, which were premised on ETH being a commodity, meant the agency would close its Ethereum 2.0 investigation.”
Is ETH not a commodity? ›
Many investors bought Ether with the expectation of profiting from its appreciation. The success and value of Ethereum are heavily dependent on the efforts of the core developers and the broader Ethereum community. Based on these criteria, one could argue that Ethereum resembles a security more than a commodity.
Is it safe to invest in Ethereum now? ›
As Ethereum is the second-largest blockchain platform, many crypto experts believe that Ethereum is a good investment compared to other cryptos. Despite all the ups and downs in Ethereum's history, analysts believe that Ethereum's price could grow further in the long-term.
Why can't i trade Ethereum? ›
If you can't go long (open a 'buy' position) on cryptocurrencies such as bitcoin or ether, the most likely reason is we have reached our internal limits on these products, and so the market is set to 'unlongable'.
What is the difference between a commodity and a security? ›
The main difference between a commodity vs. security lies in what you own. Commodities are raw materials and basic goods, while securities represent an ownership stake (e.g. stock) or a debt obligation (e.g. bonds). As such, investing in commodities and securities can offer two different paths to diversification.
What is a commodity under the CFTC? ›
(1) A commodity, as defined in the Commodity Exchange Act, includes the agricultural commodities enumerated in Section 1a(9) of the Commodity Exchange Act, 7 USC 1a(9), and all other goods and articles, except onions as provided in Public Law 85-839 (7 USC 13-1), a 1958 law that banned futures trading in onions, and ...
Is crypto a security or commodity? ›
Bitcoin is a commodity, for sure; CTFC classified it under the U.S. Commodity Exchange Act (CEA) in 2015. The SEC Chairman, Gary Gensler, further confirmed that Bitcoin is a commodity in 2022.
What does it mean if Ethereum becomes a security? ›
If Ethereum is classed as a security, we'd see much stricter controls on how you can buy and sell Ethereum. One crypto attorney told CoinDesk it would be "devastating" for American investors. For example, centralized cryptocurrency exchanges are not registered with the SEC.
Ethereum provides financial incentives to maintain network security, especially in its new PoS model. Validators (participants who confirm transactions and create new blocks) stake their own ETH as collateral, which can be lost in the event of malicious activity or negligence, thus promoting honest participation.
Is there any risk in Ethereum? ›
The risks of investing in cryptocurrencies like Bitcoin or Ethereum include market volatility, regulatory uncertainty, security breaches, and the potential for fraud or scams.
Did the SEC declare Ethereum a security? ›
After declaring in 2018 that Ether is not a security, in 2023 the SEC secretly decided to claim power over this digital asset as a security and has been conducting an invalid investigation into Ethereum.
Is Ethereum considered cryptocurrency? ›
Ethereum is a decentralized blockchain with smart contract functionality. Ether (abbreviation: ETH) is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capitalization. It is open-source software.
Are BTC and ETH commodities? ›
Investing.com – Bitcoin (BTC) and Ethereum (ETH) are now officially recognized as digital commodities by court ruling. A triumph for the crypto community? Perhaps.
What crypto company is being sued by the SEC? ›
The Securities and Exchange Commission charged Coinbase, Inc. with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency. The SEC also charged Coinbase for failing to register the offer and sale of its crypto asset staking-as-a-service program.
Did SEC approve ETH ETF? ›
Following the approval and launch of Bitcoin Exchange Traded Funds (EFTs) in January 2024, the U.S. Securities and Exchange Commission (SEC) approved eight Ethereum ETFs for listing and trading on SEC-regulated exchanges on May 23, 2024.
Is ETH high risk? ›
Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
Which Ethereum co founder says SEC is gaslighting everyone about crypto? ›
Joe Lubin cofounded Ethereum. Now his company is suing the Securities and Exchange Commission, and he says the future of the internet is at stake.
