a16z Executive Addresses SEC’s Probe into Ethereum: “ETH Not Classified as a Security”
Allegations surrounding the SEC’s investigation into Ethereum and its potential classification as a security have dominated discussions in the cryptocurrency community. However, Brian Quintenz, head of global policy at venture capital firm a16z, has expressed doubt over this possibility.
Emphasizing that Ethereum is not a security, Quintenz highlighted several essential points:
– The SEC’s approval of Ethereum Futures Exchange Traded Funds (ETFs) to trade on regulated securities exchanges explicitly recognized Ethereum as outside its jurisdiction.
– This approval came in October 2023, more than a year after Ethereum shifted to Proof of Stake (PoS) consensus in September 2022. Therefore, according to the SEC, Ethereum ceased to be regarded as a security by October 2023.
– If the SEC had any concerns about Ethereum’s regulatory status in October 2023, it would not have approved the ETF. Moreover, the listed futures contracts on which the ETFs are based would be illegal if Ethereum were indeed classified as a security.
– Furthermore, if Ethereum were considered a security, the Ethereum Futures ETF itself would be an unlawful instrument. The SEC cannot endorse the trading of an illegal instrument on a national securities exchange.
– In the event that the SEC delays or rejects an Ethereum ETF, it will be intriguing to observe the justification, if any, given that it has already acknowledged Ethereum’s position outside its jurisdiction.
Please note that this information does not constitute investment advice.