Ex-SEC Chair Jay Clayton’s comments on Ripple’s XRP sales being related to securities transactions and capital raising have sparked interest in the Ethereum ICO among industry observers. Clayton’s remarks were made during an interview with Henri Arslanian, co-founder of Nine Blocks Capital, where they discussed the regulatory landscape for cryptocurrencies in the United States. Clayton argued that there is already clarity in the regulatory scene and that crypto-focused firms should not be exempt from established securities laws.
When asked about the Ripple vs. SEC ruling, Clayton emphasized that the court identified Ripple’s initial XRP sales as unregistered securities transactions, while secondary trading transactions were not categorized as securities offerings. This ruling, which offered a partial win to both parties, has been applauded by the XRP community as it affirmed that XRP is not a security.
However, commentators in the XRP community highlighted the Ethereum ICO as an example of a transaction that raised capital from the general public. The Ethereum ICO, which took place from July 22 to Sept. 2, 2014, allowed investors to acquire 1,000 ETH with 1 BTC, valued at around $600 at the time. Early entrants could acquire 2,000 ETH for 1 BTC, equivalent to roughly $1,200 at the time. These investments have since yielded substantial profits, with the 2,000 ETH being worth over $4.5 million at the current price.
Industry observers argue that the Ethereum ICO meets the criteria for a securities transaction, as investors expected to profit from the efforts of the Ethereum team and the acquired ETH was transferable. This raises questions as to why the SEC has not taken action against Ethereum despite its pivot to a Proof-of-Stake (PoS) model in 2022.