The U.S. Securities and Exchange Commission (SEC) just approved ETH ETFs. Its decision to approve 19b-4s has sparked debate on how the regulator views Ether. Industry observers continue to argue whether ETH is a commodity or a security.
According to some industry experts, the U.S. SEC’s approval of spot ETH ETFs is an indirect admission that Ether is, in fact, a commodity. The debate about Ether’s categorization arose after the SEC effectively approved spot ETH ETF applications from eight asset management funds.
BlackRock, Bitwise, ARK 21Shares, Invesco, Grayscale, Galaxy, Fidelity, and Franklin Templeton all received approvals for their 19b-4 applications. However, the issuers omitted ETH staking from their applications to receive these approvals from the SEC.
The approval will continue since the U.S. SEC requires all eight ETH ETFs to provide S-1 registration statements for approval.
Observers Believe Ether Is Effectively a Commodity
According to digital asset lawyer Justin Browder, Ether would undoubtedly be deemed a commodity if the ETH ETFs successfully receive S-1 approvals from the SEC. The S-1 registration statements are needed for the approved ETH ETFs to start trading.
Other observers also highlighted some key points that signaled why the U.S. SEC does not consider ETH as a security. The observations argue that according to the law, funds whose assets are 40% or more securities are considered investment companies and must register on form N-1A or N-2, not the S-1, as required by the U.S. SEC.
How The SEC Views ETH Staking
Typically, Exchange-Traded Funds (ETFs) are commodity-based trusts. The U.S. SEC’s move to approve Ether ETFs would suggest the regulator views Ether as a commodity. However, the regulator shied away from addressing Ether’s categorization when issuing ETH ETF approvals.
Crypto experts argue that the SEC could potentially view ETH and staked ETH differently. The SEC may distinguish the two and consequently go after staked ETH as a security.
