The legal status of Ethereum (ETH) was discussed at recent congressional hearings in the U.S. Representative Ritchie Torres (D-NY) argued that the second-largest cryptocurrency should not be classified as a security.
Ethereum Debate
Ritchie Torres stated that a textbook example of a security is a stock, where investors expect profit from the management efforts of the company, such as Apple. Torres asked, 'If I buy Ether, from whose managerial efforts am I expecting profit?'
SEC's Position
Former SEC commissioner Dan Gallagher noted that there was no Ethereum equivalent of Apple. The Securities and Exchange Commission (SEC) recently conceded that Ethereum is not a security by permitting trading platform eToro to remain on the platform alongside Bitcoin and Bitcoin Cash. However, this was part of a private settlement with eToro and is not precedential. SEC Chair Gary Gensler has repeatedly refrained from publicly commenting on the legal status of Ethereum.
Robinhood's View
Gallagher, now serving as the chief legal officer at Robinhood, claimed that his company had over a dozen meetings and calls with the SEC over a year and a half. However, the SEC still ended up issuing a Wells notice. Gallagher criticized the commission's aggressive stance and called for establishing a basic regulatory regime for digital assets.
The ongoing discussions about Ethereum's legal status highlight the need for clear regulations for digital assets to ensure the sustainable development of the market and protect the interests of all its participants.
Comments