In a public statement Coinbase’s Chief Legal Officer, Paul Grewal, challenged the U.S. Securities and Exchange Commission (SEC) over its potential stance on spot Ethereum exchange-traded fund (ETF) applications.
Grewal argued that the SEC “has no good reason” to deny spot Ethereum ETF applications, emphasizing Ethereum is “a commodity, not a security. Per his words “millions” of Americans hold ETH.
Grewal cited past statements from senior SEC officials, including former Director of Corporation Finance Bill Hinman, who publicly suggested Ethereum wasn’t a security in 2018. Additionally, he referenced then-SEC Chair nominee Gary Gensler’s Congressional testimony that same year, where Gensler also expressed the view that Ethereum isn’t a security.
Grewal further bolstered his case by pointing to the SEC’s own legal team’s recent comparisons between Ethereum and Bitcoin in the ongoing Ripple Labs case. These comparisons, coupled with the Commodity Futures Trading Commission’s (CFTC) and federal courts’ classification of Ethereum as a commodity, help solidify his position, as do the Ether futures contracts that have been trading on CFTC-regulated platforms.
Grewal further argued that the Howey Test, a legal framework used to determine whether an asset qualifies as a security, is not applicable to Ethereum as digital assets like it “do not involve an ongoing contractual obligation related to a business enterprise,” do not fall under the definition of “investment contracts” or “securities.” Even if the Howey Test were applied, Grewal added, Ethereum would fail it.
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- Source: https://www.cryptocompare.com/email-updates/daily/2024/mar/22/
