SEC Might Consider ETH a Security

Van Buren Capital General Partner Scott Johnsson highlighted an overlooked detail in a March filing on Tuesday, suggesting that the US Securities and Exchange Commission (SEC) may consider Ethereum (ETH) a security ahead of anticipated denials for spot exchange-traded fund (ETF) applications this month.

“I’m aware this is widely considered a possibility, but this is your official notice that the SEC is considering the security question for ETH in this upcoming spot ETF order,” Johnsson said. “Note that this question was never, as far as I can tell, asked regarding a spot/futures BTC ETF product.”

Johnsson pointed out that this could allow the SEC to deny these spot filings on the grounds that they are improperly classified as commodity-based trust shares, hence not qualifying if they hold a security.

The question Johnsson referenced was found in a filing related to BlackRock’s spot ether ETF application, among others, querying:

“Given the nature of the underlying assets held by the Trust, has the Exchange properly filed its proposal to list and trade the Shares under Nasdaq Rule 5711(d), Commodity-Based Trust Shares?”