The United States Securities and Exchange Commission’s (SEC) approval of spot Ether exchange-traded funds (ETFs) is being seen as an “implicit recognition” that Ether is not a security, according to industry experts. Some even suggest that this recognition could extend to other tokens as well. Bloomberg ETF analyst James Seyffart stated that by approving these commodities-based trust shares, the SEC is explicitly stating that they will not treat Ether as a security. Digital asset lawyer Justin Browder believes that if Ether ETFs receive S-1 approval, then the debate about whether ETH is a security will be settled.
Adam Cochran, a partner at venture capital firm Cinneamhain Ventures, takes it a step further and argues that this approach could also apply to tokens from other projects. However, Seyffart and others believe that the SEC could still pursue individuals involved with staking Ether. Digital asset lawyer Joe Carlasare agrees with Seyffart and says that the SEC could go after individual actors and staking as a service, even with the ETFs launched.
In April, Consensys, an Ethereum infrastructure firm, received a Wells notice from the SEC primarily focused on MetaMask’s trading and staking services. Finance lawyer Scott Johnsson notes that the SEC did not confirm Ether’s non-security status in its approval order and said that it “completely sidestepped” the issue. However, an official statement from the SEC and its commissioners is expected in the future.
On May 23, the SEC officially approved 19b-4 applications from VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise to issue spot Ether ETFs. Many ETF issuers removed staking from their final amendments. Hashdex was the only ETF issuer that did not receive regulatory approval on that day. However, the approved ETF issuers will still need to wait for the SEC to sign off on their S-1 registration statements before they can launch their ETFs.