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Ethereum security or not? This debate has long raged on, despite the authorities having a favorable response towards Ethereum in the past. However, during a recent discussion on Twitter, the CFTC commissioner clarified the matter on Aug 14. In response to a question from Jeremy Hogan – a lawyer and crypto influencer who requested Gary Gensler – the Chairman of the U.S. Securities and Exchange Commission (SEC) to answer whether Ethereum security was clear or not?
A futures contract on a security is in both the SEC’s and @CFTC’s jurisdiction. A futures contract on a pure commodity is only in the CFTC’s jurisdiction. There is a currently a futures contract on #ETH. It is only under the CFTC’s purview which makes ETH a non-security commodity
— Brian Quintenz (@CFTCquintenz) August 14, 2021
Instead, it was the Brian Quintenz – the CFTC Commissioner who replied back by clarifying the Ethereum security status and also giving an informative scope of jurisdictions of both Commodity Futures Trading Commission (CFTC) and Securities & Exchange Commission (SEC). Mr Quintenz said that since there is a futures contract on Ether – the native token of the Ethereum blockchain, it’s under the CFTC’s purview and it’s a non security commodity.
CFTC Commissioner Warns Smart Contract Coders
However, this isn’t the first time that a top official of the US Govt clarified the Ethereum security status. Securities and Exchange Commission’s William Hinman, the agency’s director of the corporate finance division said back on Jun 14, 2018 that Ether shouldn’t be regulated in the same way as stocks and bonds by noting that “Based on my understanding of the present state of ether, the Ethereum network, and its decentralized structure, current offers and sales of ether are not securities transactions”.
Another SEC Chairman Jay Clayton also made a similar statement back in Nov. 9, 2017 saying that “When you depart from the bitcoin or the Ethereum, and you get into the tokens, the hallmarks become pretty clear.” It becomes clear that Ethereum is safe from securities classification and thus tightened regulation regarding it’s use and sale.