The United States Securities and Exchange Commission (SEC) greenlighted spot Ethereum ETFs on Thursday, a move that has gotten many confused about where the regulator really stands. The SEC’s approval of 19b-4 forms for eight Ethereum ETFs is exciting for the broad crypto industry that has anticipated it coming for a very long time.
Top Lawyers Identifies ETH as Commodity
The sudden pivot of the SEC has gotten many concerned about whether ETH is now a commodity. Similarly, it is not yet clear if the SEC now has jurisdiction over Ethereum.
Rostin Behnam, the Chairman of SEC’s sister agency, Commodity Futures Trading Commission (CFTC) is precise about his categorization of Ethereum as a commodity. Coinbase’s Chief Legal Officer Paul Grewal reiterated that Ethereum is not security.
“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.”
Similarly, Coy Garrison, former counsel for SEC Commissioner Hester Peirce, noted that the approvals of spot Ethereum ETFs confirm ETH as a commodity.
SEC Appears Double-faced With Ethereum
The Commission led by Gary Gensler has consistently attempted to categorize ETH as a security rather than a commodity like Bitcoin (BTC).
While there were several reactions from the public to this categorization, the crypto ecosystem feared that it would impact negatively on the SEC’s decision on spot Ethereum ETF applications submitted by top investment asset management firms like BlackRock.
It reached a point when the odds of receiving a positive response from the SEC on the proposed rule change went down to 40%.
In a plot twist, the securities regulator approved the offering instead, although the odds had moved up shortly before the approval. Noteworthy, trading of Ethereum ETFs is yet to commence because approved issuers are still required to have their S-1 registration statements become effective.
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