Key Points
- The US SEC is debating whether Ethereum (ETH) is a security or a commodity, with a final decision expected soon.
- Unredacted court documents suggest that US SEC Chairman Gary Gensler has believed Ethereum to be an unregistered security for at least a year.
The United States Securities and Exchange (SEC) is nearing a final decision about the status of Ethereum (ETH).
The ongoing debate is whether Ethereum should be classified as a security or a commodity.
US Regulatory Uncertainty
The US Congress has yet to approve a clear cryptocurrency regulatory framework ahead of the upcoming general election.
This has led to public contradictions between the US SEC and the Commodity Futures and Trading Commission (CFTC) on cryptocurrency matters.
However, Bitcoin has been classified as a commodity following the approval of spot Bitcoin ETFs.
Ethereum’s Security Status
Court documents filed by Consensys Software Inc suggest that the US SEC and its chairman Gary Gensler have believed Ethereum to be an unregistered security for at least a year.
Consensys is challenging this view, arguing that Ethereum is a global computing platform, not an investment scheme.
The SEC’s Division of Enforcement has begun an investigation into Ethereum’s status as a security, with enforcement staff authorized to investigate and subpoena individuals and entities involved in Ethereum trading.
This investigation, known as Ethereum 2.0, is examining offers and sales of certain securities, including Ethereum.
The outcome of this case could have significant implications for the entire altcoin industry.
Consensys contends that the SEC has been inconsistent in its stance on crypto regulations.
Interestingly, the SEC approved the Ethereum 2.0 investigation a few days before Chairman Gensler appeared before the House Financial Services Committee and declined to comment on Ethereum’s security status.
Market Implications
As the final decision on the spot Ether ETFs approaches, market experts predict that the SEC is likely to reject its listing and trading.
However, there is hope for the Ethereum community as the court may compel the SEC to reconsider the spot ETF applications.
The approval of the spot Bitcoin ETFs was heavily influenced by the outcomes of a previous SEC case.
Meanwhile, Ethereum’s price is struggling to reach its all-time high, with a crucial support level at $3,170.
Should this level fail to hold, Ethereum’s price could drop towards $2,700.
