Is Ether a Security? Congressman Explains Why It’s Not the Case

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As a seasoned analyst with years of experience navigating the complexities of financial regulations and emerging technologies, I find myself intrigued by the ongoing debate surrounding Ethereum’s legal status. Having closely followed the evolution of digital assets and their interactions with regulatory bodies, it is clear that the SEC’s stance on ETH has been, at times, as elusive as a Bitcoin whale in the depths of the crypto ocean.

Representative Ritchie Torres, a prominent Democrat from New York and a strong advocate for cryptocurrencies, recently expressed his views about the legal classification of Ethereum (ETH) during a congressional hearing. He suggested that instead of being labeled a security, Ethereum, the second-largest digital currency, should be considered under a different category.

In simpler terms, Torres wondered if when he buys Ether, he is anticipating profits from the same kind of management skills as with Apple stock, since stocks like Apple are often used as examples to illustrate investment in securities.

As a research analyst, I’d like to clarify Dan Gallagher’s recent statement regarding Ethereum. He implied that Ethereum, much like Apple Inc., does not have an equivalent in its respective domain. In other words, just as Apple is unique within the tech industry, Ethereum appears to hold a singular position within the blockchain and cryptocurrency sector at present.

According to U.Today’s report, the SEC has acknowledged that Ethereum is not classified as a security by allowing trading platform eToro to continue operating alongside Bitcoin and Bitcoin Cash. This decision was made in a private agreement with eToro, though, which means it doesn’t establish a legal precedent for future cases.

In simpler terms, Gary Gensler, as the head of the SEC, has consistently avoided expressing his views on whether Ether is legally considered a security in public forums.

Ignoring Robinhood 

Gallagher, currently holding the position of Robinhood’s top legal advisor, asserts that they had more than a dozen discussions and phone calls spanning over a year and a half with them. Yet, despite this, the Securities and Exchange Commission (SEC) still delivered a Wells notice to us.

At the hearing, the ex-SEC commissioner asserted that the agency’s team had failed to provide the company with necessary advice on multiple occasions when they sought it.

Gallagher has spoken out against the commission’s firm approach, simultaneously advocating for the creation of a fundamental regulatory framework for digital assets.

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2024-09-19 12:16