Can paid ETH be classified as a security? Galaxy Explorer weighs in.
Alex Thorne, head of research at Galaxy Research, raised concerns that the United States Securities and Exchange Commission (SEC) might classify the stock Ether as a security. Thorne's speculation follows expectations that the SEC may soon approve ether exchange-traded funds (ETFs).
“If the speculation from the SEC about the 180 on Ethereum ETFs is true, I suspect that they will try to straddle the needle between “ETH” as a security and “staked ETH” (or even more weakly, considering “ETH as a service”). “) as security”.
Thorne suggested that the strategic pillar for approving the Spot Ether (ETH) ETF may be “somewhat consistent” with past court cases.
“[…] Also let them approve ethereum ETFs pending reports on their various investigations, and perhaps the SEC's previously expressed/disputed opinions.
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In response to Thorn's X post, a community member raised an additional concern considering that embedding Ether in an ETF would create unaccountability hurdles, making it difficult to comply with regulatory compliance requirements.
Thorns “wasn't sure” but addressed this societal concern by highlighting that ETF-backed lending often has limits, which could be a reasonable reference point. But he added that European exchange-traded products (ETPs) also offer stock services.
Historically, the SEC has tried to classify Ether as a security, a pattern that continues, as seen in a recent report by Fox Business producer Eleanor Terrett.
Terrett, citing court documents filed by Consensus on April 29, said the SEC and SEC Chairman Gary Gensler believed ether was an unregistered security “for at least a year.”
Eric Balchunas, a senior analyst at Bloomberg, said on May 20 that the probability of approval for the Ethereum ETF has risen from 25% to 75%, despite the continuous swing between approval and opposition.
This drastic change in attitude happened after Balchunas heard the chat. […] It is what he says. [the] The SEC may be doing a 180 on the issue as an “increasingly political issue.”
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