SEC In Deep Trouble After Spot Ethereum ETF Approval, Lawyer Says

Yesterday, the United States Securities and Exchange Commission (SEC) approved eight spot Ethereum exchange-traded funds (ETFs). This ruling indicates that the financial agency classifies Ether (ETH) as a commodity, not a security.

In light of this approval, James Murphy, a crypto attorney also called MetaLawMan, recently tweeted that the regulatory watchdog “is in deep trouble with some of its crypto cases.” Here’s why.

SEC’s Stance on Cryptocurrencies

Under the leadership of its current chairman, Gary Gensler, the SEC has fought against several crypto projects and companies, arguing that cryptocurrencies are securities. Such classification would imply that these digital assets must be registered under the SEC before offering them to U.S.-based investors.

Over the past few years, the agency has engaged in legal tussles with crypto-focused firms like Coinbase, Ripple, Binance, and more. According to the SEC, these platforms facilitated the sale of cryptocurrencies, which it calls unregistered securities. Legal cases involving some of these companies are still ongoing.

Weeks ago, the SEC upheld its claim that ETH was a security. It even issued a Wells notice to Consensys, a software firm supporting Ethereum, claiming that the company broke securities laws by offering ETH to investors through MetaMask.

Yesterday’s approval for the spot Ethereum ETF shows that the SEC has now changed its stance on ETH being a security.

“The SEC Is In Deep Trouble”

MetaLawMan believes that the latest approval from the SEC may favour Coinbase in its legal case against the agency. According to Murphy, the financial watchdog “will have difficulty explaining how ETH, which operates within a giant ecosystem, is a commodity, but SOL and ADA are securities when traded on Coinbase.”

He added that Coinbase may likely reference the Ethereum ETF approval as a reason for a court rehearing as the SEC changes its hostile stance of ETH being a security.