Regulators at the U.S. Securities and Exchange Commission (SEC) have not taken any official stance over the growing concerns of legal status or security of Ethereum and Bitcoin. SEC Chairman Gary Gensler had previously deemed Bitcoin as a commodity. However, his comments dating back to 2018 stated that Ethereum was non-compliant security. Until an official statement by the regulatory agency is released, a senior counsel at the SEC recommends that investors take a note of caution.
The Ambiguity in SEC Concerning the Legal Status of Security of Ethereum
During a recent conference with Magistrate Judge Sarah Netburn, Dugan Bliss, senior trial counsel at the U.S. SEC, said that the agency hasn’t taken an official position on the regulatory status of Bitcoin and Ethereum:
“So I want to make clear that this is my understanding of the current situation and I don’t want to be overly technical, but the SEC, itself, my understanding, it has not taken an official position. There is no action that it took to say Bitcoin is not a security, Ether is not a security.”
Despite regulators, previous claims on Bitcoin’s non-security status, the same does not apply to Ethereum. For instance, Dugan Bliss disregarded previous claims made by Bill Hinman, former director of the SEC’s Division of Corporation Finance, who suggested that offers and sales of ETH come under non-securities status, just months before the end of his tenure in 2018.
“Now, there was a speech by a high-ranking person who said that to him that’s what it looked like, but there has been no action letter, no enforcement action, none of the official ways in which the SEC takes a position on that matter that has occurred,” says Dugan Bliss
Gary Gensler Previously Attributed ETH as Non-Security
Until an official statement is released, investors should approach Ethereum with caution, suggests counsel Bliss.
Ripple and its two executives, Chris Larsen and Brad Garlinghouse, are currently under charges for the sale of unregistered securities worth $1.3 billion. Meanwhile, the Ethereum Foundation and its founder Vitalik Buterin have not come under the scrutiny of the regulatory agency yet.