Bloomberg Analyst Says the SEC Has Backed Down on Ethereum Being Security

Bloomberg’s ETF analyst James Seyffart argues that the SEC has, through its actions, conceded that Ethereum is not a security.

The status of Ethereum’s native asset, ETH, under U.S. laws, has been debated over the years. The United States Securities and Exchange Commission (SEC) has sued several crypto projects for issuing tokens that were allegedly securities.

Yet, the regulatory agency has not sued the Ethereum Foundation or publicly alleged that ETH is a security.

The agency’s silence on Ethereum and recent actions about the asset point to it viewing ETH in a different light, according to James Seyffart. The experienced analyst, who has discussed the potential launch of a spot Bitcoin ETF in the U.S., believes that the SEC does not view ETH as a security.

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In a recent interview, he said, “My view is that the SEC has pretty much implicitly accepted Ethereum as a commodity at this point. They also now have approved Ethereum futures ETFs, which are squarely in their purview.”

According to James Seyffart, the SEC going back to calling ETH a security would mean delisting all Ethereum futures they have already consented to launch.

At the same time, such a scenario would mean that the SEC would be fighting against not only the crypto industry but also, ultimately, its sister agency, the Commodity and Futures Trading Commission (CFTC), which oversees futures contracts.

SEC and Gary Gensler have picked Bitcoin and Ethereum as Non-Securities

The Bloomberg ETF analyst continued by saying that the SEC and its Chair Gary Gensler have already handpicked Bitcoin and Ethereum as being commodities instead of securities.

He predicts that sometime in 2024, SEC Chair Gensler will publicly call Bitcoin a commodity and then remain silent on Ethereum’s status, evidently confirming that it is not a security.

Is the SEC backing down on Ethereum? 🤔

Bloomberg’s @JSeyff spills on @unchained_pod: With Ethereum futures ETFs already approved, the SEC might be subtly pivoting to conceding that Ethereum is a commodity. 💥

🎧 Listen now: https://t.co/lD20tIkl6Z pic.twitter.com/z5npQg2uEM

— Laura Shin (@laurashin) December 16, 2023

James Seyffart believes that waging a war against Ethereum to declare it a security is not just worth the SEC’s energy at this point in the project’s history. Hence, Gensler would give it a pass and then call “pretty much anything else under the sun a security.” 

An asset labeled a security would subject the founding entity to registrations, regular financial reporting and disclosures with the SEC. On the other hand, as a commodity, such burdens are not required by the SEC, as the asset is outside its purview.

SEC Chair Gensler has repeatedly suggested that most crypto projects that issue tokens should be deemed securities and come under the agency’s purview.

Yet, the crypto industry has vehemently defended its position with ongoing lawsuits against Ripple and Coinbase, all connected to the status of crypto assets as securities or commodities.