So ultimately, what is the legal status of Ethereum (ETH)? Is it a security or not?
The lawsuit proving whether XRP is a security or not is not over yet. But perhaps XRP is a case study in the crypto market. Therefore, to be sure, attorney Jeremy Hogan asked the chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, about the legal status of Ethereum. However, CFTC commissioner Brian Quintenz was quicker than Gensler.
Is Ethereum (ETH) security?
Hogan, a seasoned crypto regulation expert, and partner at Hogan & Hogan law firm, tweeted asking Gary Gensler if Is ETH security or not?
A futures contract on a security is in both the SEC’s and @CFTC’s jurisdiction. A futures contract on a pure commodity is only in the CFTC’s jurisdiction. There is a currently a futures contract on #ETH. It is only under the CFTC’s purview which makes ETH a non-security commodity
— Brian Quintenz (@CFTCquintenz) August 14, 2021
According to the lawyer, Gensler is well informed about the legal status of ETH. In addition, the Commission recently stated that US securities laws are obvious. That is why Hogan asked for a clear and definitive answer on the state of Ethereum (ETH).
However, before Gensler could respond, CFTC commissioner Brian Quintenz pointed out that the SEC and his agency, the CFTC, are jointly responsible for regulating the securities futures segment. At the same time, ETH futures are only within the CFTC’s target. That is why Ethereum (ETH) should not be viewed as a security, Quintenz concluded.
However, the replies of Quintenz and even Gensler on Twitter were not acknowledged. Not to mention that Gensler previously emphasized in an interview with the New York Times that Ethereum and XRP could be classified as non-compliant securities.
“There is a strong case for both of them — but particularly Ripple — that they are non-compliant securities,” he stated.
Notably, Gensler confirmed that he viewed Bitcoin as a commodity during his recent congressional hearing:
“So I think at the SEC it’s really to the extent somebody is offering an investment contract and security that’s under the SEC’s remit and exchanges that operate there. If not, it’s a commodity as Bitcoin has been deemed.”
Unlike Bitcoin, Ethereum pre-mined a substantial portion of coins before holding its Initial Coin Offering (ICO).
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