Stocks or commodities? What do the experts say?

Stocks or commodities? What's the experts' take?

Author: Andrew Throuvalas, Decrypt; Translation: Matsuyuki, Blocking

Despite the legal battle launched by the US Securities and Exchange Commission (SEC) in the cryptocurrency field, Ethereum co-founder Joseph Lubin has not slackened.

Ethereum co-founder Joseph Lubin speaks at Camp Ethereal in Wyoming in March 2022. Photo by Chie Endo

When asked in a CNBC interview on Tuesday whether regulators could consider Ethereum (ETH) a security, the CEO of Consensys explained that regulatory rulings on Ethereum have already been made.

“The SEC has spoken,” he referred to former SEC commissioner Bill Hinman’s 2018 speech on crypto securities and Ethereum.

New documents show that Hinman received multiple warnings from colleagues that the speech could lead the market to believe that the US Securities and Exchange Commission had already deemed the asset a non-security.

A security is a financial instrument that is typically (but not always) associated with some sort of investment contract. In contrast, a commodity is a basic or natural good, like gold, wheat, or cattle.

“The Commodity Futures Trading Commission has stated multiple times that they think Ethereum is a commodity,” Lubin added.

While Commodity Futures Trading Commission (CFTC) Chairman Rostin Benham agrees that many cryptocurrencies are securities, he also believes that three top assets such as Bitcoin (BTC), Ethereum (ETH), and Tether (USDT) belong to the jurisdiction of the agency as commodities.

Chairman of the Commodity Futures Trading Commission (CFTC) Rostin Benham

In contrast, US Securities and Exchange Commission Chairman Gary Gensler only publicly acknowledges that Bitcoin itself is a commodity.

As for Ethereum, Gensler has remained tight-lipped. Some videos of him during his tenure as a professor at MIT suggest that he once believed it to be a security, while others indicate that he believed Ethereum had shifted from a security to a commodity by 2018.

US Congress members, including Cynthia Lummis and Kirsten Gillibrand, are drafting legislation to address the issue and believe that Ethereum is a commodity, just like Bitcoin, which is in line with the Commodity Futures Trading Commission (CFTC).

Lubin said: “At this point, it really is an expected conclusion. There may be one or two regulatory agencies in the US that don’t want to admit that Ethereum is not a security, but I don’t know why that would be.”

Earlier this month, the SEC sued Binance and Coinbase, accusing the platforms of listing more than a dozen assets that are securities, including the stablecoin BUSD issued by Blockingxos.