SEC officials plan to classify Ether as a security

The second largest cryptocurrency by market capitalization, Ethereum (ether, ETH), is successfully holding above the $3,000 mark and is again trying to approach the $4,000 level.

Several applications for the issuance of spot exchange-traded funds (ETFs) that invest in the altcoin are under consideration by the U.S. Securities and Exchange Commission (SEC). Applications for a spot Ethereum ETF have been filed by the world’s largest management companies, including BlackRock and Fidelity. On March 19 and 20, the SEC extended the deadlines for considering applications for funds from some companies, citing the need for a more thorough study of the issue. However, Bloomberg analysts are inclined to believe that the applications will not receive approval from the regulator.

According to Fortune, the SEC is seeking to recognize ether as a security. If ETH is recognized as a security, the Securities and Exchange Commission intends to take control of the regulation of transactions with this asset. Journalists managed to find out that several companies with business relationships with the Ethereum Foundation, the issuer of ether, received letters from the SEC. They contain a requirement to provide documents and financial data regarding their transactions with the Ethereum Foundation, a non-profit organization that develops the ETH ecosystem.

The SEC’s investigation into the Ethereum Foundation began after the Ethereum blockchain transitioned from the PoW (Proof-of-Work) mining algorithm to the PoS (Proof-of-Stake) staking algorithm in 2022.

Bitcoin is recognized as a commodity in the United States, and its issuance is carried out through mining. In contrast, crypto assets that are issued through the staking algorithm have already been classified as unregistered securities. A precedent was set in 2023 as part of lawsuits against leading crypto exchanges Binance and Coinbase.

The Chairman of the Securities and Exchange Commission, Gary Gensler, does not comment on the information from the Ethereum Foundation disseminated through the media. However, since 2018, he has repeatedly stated that ether, bitcoin, litecoin, and Bitcoin Cash cannot be considered securities.