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Ether ETF approval proves ETH is not a security, experts say

This landmark event signals that regulators view Ethereum more as a currency or commodity than a traditional security.

Date: 2024-05-24 Author: Łukasz Michałek
Ether ETF approval proves ETH is not a security, experts say

According to industry experts, the recent approval of Ethereum ETFs by the U.S. Securities and Exchange Commission (SEC) potentially confirms Ether’s status as a non-security.

Bloomberg ETF analyst James Seyffart, in a Bankless podcast with Ryan Sean Adams, stressed that the approval of these commodity-based trust stocks means that the SEC clearly recognizes Ether as not being a security.

Seyffart further suggested that this recognition could be extended to other tokens as well, reinforcing their classification as commodities.

S-1 approval will end the debate over the status of ETH

Digital asset lawyer Justin Browder echoed Seyffart’s opinion, saying that if Ether ETFs receive S-1 approval, which is the final requirement for them to begin trading, it will settle the debate once and for all, confirming that ETH is in fact not a security.

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Adam Cochran, a partner at venture capital firm Cinneamhain Ventures, went a step further, suggesting that this way of thinking can also be applied to tokens of other projects.

“ETH is a commodity, even with its current attributes. This means we can extrapolate to MANY other projects with security-relevant elements,” Cochran said.

“Today, many things have probably become commodities, even if they don’t know it yet.”

Although the approval of Ether ETFs reinforces Ether’s non-security status, Seyffart and other experts predict that the SEC may continue to focus on entities involved in staking Ether.

Seyffart speculates that the SEC could distinguish between Ether itself, which it would not consider a security, and staked Ether, which could potentially fall under the definition of a security.

Digital asset lawyer Joe Carlasare shares this view, suggesting that the SEC could pursue individual investors and offer staking as a service despite the launch of ETFs.

It is worth noting that the SEC’s approval order did not explicitly confirm Ether’s non-security status, with leading financial lawyer Scott Johnsson commenting that the issue was “completely ignored.”

However, an official statement from the SEC and its commissioners is expected to provide more clarity in the future.

SEC approves 19b-4 proposals

on May 23, the SEC officially approved 19b-4 applications from VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy and Bitwise to issue Ether ETFs.

It’s worth noting that several ETF issuers have removed staking from their final amendments. Hashdex was the only issuer that did not receive regulatory approval that day. However, all eight approved ETF issuers must wait for SEC approval of their S-1 registration statements before launching their ETFs.

Bloomberg ETF analyst James Seyffart predicts that S-1 approvals could be issued within a few weeks, although he acknowledges that the process could take longer, typically up to five months. However, another Bloomberg ETF analyst, Eric Balchunas, believes a mid-June launch is certainly possible.

As we reported, Singapore-based QCP Capital believes that the approval of Ethereum ETFs in the United States could potentially trigger a significant increase in the price of ETH by as much as 60%.

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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