Coinbase CLO dismisses rumors, says Ethereum is not a Security - CryptoCrazeNews

Coinbase CLO dismisses rumors, says Ethereum is not a Security

Coinbase CLO dismisses rumors, says Ethereum is not a Security

Coinbase CLO dismisses rumors, says Ethereum is not a Security

Emerging reports surrounding the US Securities and Exchange Commission’s (SEC) potential classification of Ethereum (ETH) as a security didn’t take the crypto industry by surprise. The US SEC had been allegedly categorizing several top cryptos as “Security” by filing lawsuits. In this debate, Coinbase’s Chief Legal Officer shared his take on the nature of Ether.

Coinbase CLO defends Ethereum

Paul Grewal, Chief Legal Officer at Coinbase, took to Twitter to address what he described the situation. He tagged it as misinformation linked to Ethereum’s status as “Security”. He highlighted that millions of Americans hold ETH and cleared that ETH is a commodity, not a security.

Coinbase CLO cited statements from senior SEC officials stating that the commission has taken this position for years. This includes former SEC Director of Corporation Finance Hinman and current SEC Chair Gary Gensler. These officials have previously indicated that ETH is not a security.

He added that the regulatory clarity had been provided by the Commodity Futures Trading Commission (CFTC) and federal courts earlier. These authorities have consistently affirmed the second biggest crypto’s status as a commodity.

Grewal even argued that even if the Howey test were applied, Ether would not meet the criteria to be classified as a security. He further mentioned a concern that the commission may attempt to question the established regulatory status of the token. However, he stressed the importance of sticking to existing legal frameworks.

Talking over the ETH linked ETP applications, he stated that the commission has no good reason to deny the applications around it.

What is happening?

According to reports the SEC initiated an investigation into the Ethereum Foundation. The probe on the Swiss nonprofit organization behind the Ethereum blockchain was disclosed on the foundation’s GitHub repository. This included a requirement for confidentiality. 

It is important to note that the US watchdog’s inquiry into Ethereum’s classification comes in when the top investment companies are expecting a decision on the approval of the spot ETH Exchange-Traded Fund (ETF). Classifying the biggest altcoin as security will impact the plans built around it. However, it can definitely introduce legal hurdles for ETH linked projects.

Data shows that ETH price jumped by around 10% in the last 24 hours after a heavy dump. However, It is still down by 12% in the last 7 days. Ethereum is trading at an average price of $3,515, at the press time. Its 24 hour trading volume is down by 8% to stand at $31.9 billion.

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