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Gary Gensler, the SEC Chair, is being cautious on Ethereum as expressed during a CNBC interview, particularly in the context of approving a spot Ethereum ETF. This comes against the backdrop of the SEC’s recent approval of spot Bitcoin ETFs, which were accepted due to Bitcoin’s status as a non-security commodity token.
While Bitcoin has been consistently treated as commodity by the SEC, the regulatory body remains undecided on Ethereum‘s classification. Gensler carefully avoided detailed comments on Ethereum ETFs but hinted at the possibility of Ethereum being classified differently from Bitcoin. If Ethereum is deemed a security, it could face more intense regulatory scrutiny from the SEC, which might complicate the approval process for a spot Ethereum ETF.
This distinction between Bitcoin and Ethereum is crucial. Bitcoin’s recognition as a commodity places it outside the SEC’s main regulatory framework. On the other hand, legal filings suggest the SEC is leaning towards treating Ethereum transactions as falling under its jurisdiction. Such a classification would contrast sharply with Bitcoin’s and could significantly impact Ethereum’s regulatory journey.
A decision on approving a first Ethereum ETF in the US was recently postponed to May of 2024, giving time for further evaluation.