There is a debate whether Ethereum should be considered a security or not. Indeed, there are several cryptocurrencies that are being analysed by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).


Ethereum has experienced on May the 7th, an 8.5% decline and its price reached $710 per token.


Is Ethereum a Security, a Commodity or a Currency?


A topic that has been on the media during the last months, is shaking the cryptocurrency market. Two of the most important US regulators are discussing whether they consider the second most important virtual currency, Ethereum, a security, a commodity or a currency. The Wall Street Journal reported on May the 1st, that the SEC and the CFTC were going to debate about the future of some virtual currencies. Ripple (XRP) and Ethereum (ETH) were among the digital currencies mentioned.


The cryptocurrency community has been very concerned about the event that will define the future of these important virtual currencies. Moreover, the decision taken by the regulators could have a deep impact on many crypto investors. But Joseph Lubin, Ethereum Foundation Co-founder, tried to calm investors down explaining that they were also analysing the situation with a team of experts on the matter. Furthermore, Lubin said that Ethereum does not need to be regulated because it is not a security.

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Mr. Lubin, said:

“We spent a tremendous amount of time with lawyers in the US and in other countries, and are extremely comfortable that it is not a security; it never was a security… many regulators that matter understand what Ethereum is.”


Ethereum’s founders are also trying to prove with all their efforts that a former CFTC chairman, Gary Gensler, said that unlike some virtual currencies in the market like Bitcoin or Litecoin, Ethereum and Ripple share some characteristics with securities.


Are ICOs Securities?


According to SEC Commissioner Michael Piwowar, all cryptocurrencies that have been launched through an ICO should be considered as securities. Ethereum has been launched via an ICO which may be of importance to determine whether it is a security or not.


Mr. Piwowar commented:

“Is an ICO a security?… so far, as our chairman has said, everyone that he has looked at, everyone I have seen is a security… Bitcoin itself is not a security but these customized tokens for these initial coin offerings, most of them are. There is some legitimate stuff going that is on and then there is literally the fraud ones.”


Several Initial Coin Offerings have been totally scams. Indeed, an important amount of ICOs disappeared after gathering the funds needed, while other simply couldn’t keep with the project because of incompetence or other issues. If Ethereum and Ripple are not considered securities, their prices could see an important surge. With Bitcoin trying to cross the $10,000 barrier, it would be important to follow these events very near. Could this be the beginning of the next bull run?

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Carlos Terenzi

Carlos is an International Relations and cryptocurrency analyst passionate about digital assets. He has been working for several firms in the crypto space assessing virtual currencies.

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