There’s been much discussion in the cryptocurrency world about whether the SEC will classify Ethereum as a security in the United States. This issue has been up for debate for some time now, and different opinions have emerged from analysts and experts in the industry.
New York Attorney General Fuels the Debate
More recently, Metalaw, a crypto expert and attorney, commented on the issue, drawing attention to the New York Attorney General (NYAG) Letitia James’ actions from about a year ago. Last year, James gained media attention by announcing that Ethereum, one of the major cryptocurrencies, falls under the category of securities.
Will @GaryGensler declare $ETH a security?
Maybe.
NYAG Letitia James had made the same announcement a year prior and shared the news through a public statement.
In a legal proceeding, this is among the initial instances where a regulatory body asserts that Ethereum, a prominent cryptocurrency,…
— MetaLawMan (@MetaLawMan) April 23, 2024
During a court case opposing cryptocurrency exchange KuCoin, James argued that Ethereum should be considered similar to LUNA and UST. He based his claim on the idea that ETH is a risky investment that only generates profits for its owners through the work of external developers. Consequently, according to him, it is necessary for Ethereum to be registered as a security before being offered for sale.
The classification of Ethereum as a security or not is a topic of much discussion, with important consequences for the prospective approval of an Ethereum ETF. Securities are subject to rigorous regulatory control and mandatory registration. Given this, SEC Chairman Gary Gensler’s ambiguous stance on Ethereum’s classification has generated buzz, as he has neither confirmed nor denied the possibility, emphasizing that it hinges upon the specific facts and applicable US laws.
Diverging Views from Industry Experts
If Ethereum is classified as a security and receives approval for an ETF, it could trigger the green light for an ETH ETF. This prospect has fueled optimism among traders and investors, who are hoping for a significant price increase similar to what occurred following the approval of the Bitcoin ETF. Nevertheless, potential ETF issuers have expressed doubts about a favorable decision.
Jan van Eck, CEO of VanEck, has hinted that the Ethereum ETF approval may be denied based on past experiences with Bitcoin ETFs. Regulators have historically taken their time in providing feedback on these applications, which took several weeks before eventual approvals. However, at present, no such indications of a similar review process are visible for Ethereum.
Additionally, Eric Balchunas, an analyst at Bloomberg, assesses the probability of approved Ethereum spot ETFs in May as low, at only 35%. Although there are potential reasons for approval, Balchunas points out that the positive indicators that once suggested optimism for Bitcoin’s spot ETF approval are currently absent when it comes to Ethereum.
The ongoing dispute over Ethereum’s classification as a security continues to fuel intense debate within the cryptocurrency community. However, there remains a sense of optimism among traders and investors, who are keenly anticipating a decision that could significantly boost Ethereum’s price. This positive outlook is reinforced by the actions of large ETH wallet holders, who have been buying more coins, demonstrating their faith in Ethereum’s future potential.
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2024-04-24 18:16