SEC Chairman Still Won't Say Whether Ethereum (ETH) Is a Securities

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has still not clearly answered whether Ethereum (ETH) is legally a security.

In an interview with Bloomberg on Thursday, the chairman was asked about regulatory issues surrounding Ethereum, as applications for an Ethereum spot ETF are backlogged at the agency.

Why doesn’t Gensler answer?

Gensler’s answer remained vague, stating: “As with any cryptocurrency, the key is whether investors expect to be profitable relying on the efforts of others.”

He joked: "The key for any cryptocurrency is whether investors believe in its value and whether they can obtain the expected profits from the efforts of others."

"We do have filings before us at the moment, but I won't comment on that," he added.

Gensler’s refusal to answer questions adds to the uncertainty in the crypto market since former SEC Director William Hinman spoke in 2018. In the speech, Hinman stated that he believes Ethereum should be treated as a commodity rather than a security.

Gensler and the agency have since denied making any official statements or announcements on ETH, dodging the question multiple times when asked.

They also claim that dozens of popular cryptocurrencies, including Solana (SOL) and Cardano (ADA), are securities and have made this argument in lawsuits against major crypto trading platforms including Coinbase and Binance.

However, there are reasons to believe that the agency has a different view on ETH. Similar to Bitcoin, the SEC has approved the exchange’s CME Ethereum futures. According to Bloomberg ETF analyst James Seyffart, this means the asset has been treated as a commodity.

Additionally, Commodity Futures Trading Commission (CFTC) Chairman Rostin Benham has explicitly classified ETH as a commodity for years, and several pro-crypto members of Congress have backed his stance.

Testifying before a House committee on Wednesday, the chairman said that if the SEC allows Prometheum, an SEC-approved crypto broker, to classify ETH as a security on its platform, it could lead to more regulatory uncertainty. He is working closely with Gensler on the matter.

Benham explained: “This would make our registrants (the exchanges on which we list ether as futures contracts) subject to SEC regulations rather than CFTC regulations.”

Cryptocurrency remains a place of speculation

While avoiding answering the question directly, Gensler reiterated that crypto remains a "highly speculative asset class" and referenced Bitcoin's volatility over the past week. He said:

“You should know, as the investing public, these volatile assets are a bit of a roller coaster ride, so the question is, how do companies lay the groundwork?”

After approving a Bitcoin spot ETF for open market trading earlier this year, Gensler noted that the SEC’s approval “is not an endorsement of Bitcoin” and claimed that the asset is often used in financial crimes.

Bitcoin has gained 53% since the start of the year, briefly hitting a new record high of $69,200 on Tuesday.

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