The United States Securities and Exchange Commission’s (SEC) approval of spot Ether exchange-traded funds (ETFs) is being seen as an “implicit recognition” that Ether is not a security, according to industry experts. Bloomberg ETF analyst James Seyffart stated that the approval of these commodities-based trust shares indicates that the SEC will not consider Ether as a security. This could potentially extend to other tokens as well. Digital asset lawyer Justin Browder believes that if Ether ETFs receive S-1 approval, it will settle the debate and confirm that ETH is not a security.
Venture capital partner Adam Cochran suggests that this approach could also apply to tokens of other projects. However, there is a belief among some experts, including Seyffart, that the SEC may still pursue individuals involved in staking Ether. Digital asset lawyer Joe Carlasare agrees with this view, stating that the SEC could target individual actors and staking services even after the ETF has launched. In April, Consensys, an Ethereum infrastructure firm, received a Wells notice from the SEC regarding MetaMask’s trading and staking services.
Finance lawyer Scott Johnsson points out that the SEC did not explicitly confirm Ether’s non-security status in its approval order, avoiding the issue altogether. However, it is expected that the SEC and its commissioners will release an official statement on this matter in the future.
On May 23, the SEC officially approved 19b-4 applications from several ETF issuers, including VanEck, BlackRock, and Fidelity, allowing them to issue spot Ether ETFs. However, these issuers still need the SEC’s approval on their S-1 registration statements before they can launch their ETFs. Hashdex was the only ETF issuer that did not receive regulatory approval on that day.
The battle between the SEC and the crypto industry is reminiscent of the epic showdown between Godzilla and Kong in the recent movie. The SEC faces a fierce fight against the legal firepower of the crypto industry.