The SEC’s chair, Paul Atkins, recently announced that the agency informally considers Ethereum (ETH) a commodity, not a security. This is similar to their stance on Bitcoin. While this isn’t official policy yet (they’re still working on formal rules), it’s a huge relief for many investors.
SEC’s Informal Stance on ETH
Atkins stated that the SEC views ETH in the same way as Bitcoin – as a commodity. This informal declaration has already boosted investor confidence, with major firms increasing their ETH holdings.
The Road to Clarity
The SEC’s Crypto Task Force has been holding discussions to clarify how federal laws apply to cryptocurrencies. While previous investigations under Gary Gensler left many questions unanswered, Atkins’ statement provides some much-needed clarity. The Commodity Futures Trading Commission (CFTC) has also long considered both Bitcoin and Ethereum to be commodities. However, some uncertainty remains, particularly regarding the tax implications of staking rewards.
Institutional Investors Embrace ETH
Big companies are piling into ETH. Firms like BTCS, SharpLink Gaming, and Gamesquare have significantly increased their ETH holdings, adding millions of dollars worth in recent weeks. One startup, Ether Machine, is even planning an IPO backed by $1.6 billion in ETH, demonstrating significant confidence in the asset.
Record ETF Inflows and Price Surge
ETH-focused exchange-traded funds (ETFs) are seeing record inflows, pushing the price of ETH to over $3,639 – a 24%+ increase in just a week. Traders are optimistic about further price growth if the SEC maintains its current informal position.
Staking and Regulatory Uncertainty
Despite the positive news, some questions remain. Applications for Ethereum staking ETFs are still pending at the SEC. BlackRock’s application, for example, has been delayed. There’s concern about whether staking rewards should be classified as securities or income, impacting tax liabilities. While CFTC Chair Rostin Behnam supports the commodity classification, the lack of formal SEC guidance leaves many in the DeFi and staking space with unanswered questions.