In a recent seminar with Court Judge Sarah Netburn, Dugan Bliss, a senior adjudicator at the US Securities and Exchange Commission, argued that the agency has not yet made a formal position on the regulatory status of Bitcoin and Ethereum. Bitcoin looks more certain, however, the status of ETH is being disputed as is the case with XRP.
Ethereum could still be classified as a security
“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.”
While former SEC chairman Jay Clayton has repeatedly stated that Bitcoin is not a security, there is less regulatory certainty over Ethereum.
Bill Hinman, former head of the SEC’s Corporate Finance Division, issued a statement of approval on the sale of Ether and non-securities offers just months before the end of his term in 2018.
Bliss stated that Hinman’s speech does not necessarily reflect the regulator’s stance on Ethereum:
“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.”
However, the upcoming SEC chairman Gary Gensler has made it clear that both Ether and XRP are non-compliant securities in an interview with the New York Times:
“There is a strong case for both of them — but particularly Ripple — that they are non-compliant securities.”
Notably, Gensler confirmed that he sees Bitcoin as a commodity during his recent congressional hearing:
“So I think at the SEC it’s really to the extent somebody is offering an investment contract and security that’s under the SEC’s remit and exchanges that operate there. […] If not, it’s a commodity as Bitcoin has been deemed.”
Unlike Bitcoin, Ethereum pre-mined a significant portion of the money prior to holding the initial coin offering (ICO).