Congressman Challenges Ethereum’s Security Status – SEC’s Mixed Signals Continue

During a recent congressional hearing, Democrat Ritchie Torres argued that Ethereum (ETH) should not be considered a security.

Torres pointed out that, unlike stocks where investors anticipate profits from a company’s management, Ethereum does not fit this model.

Is Ether a security? When you buy Apple stock, it means you’re expecting a profit from the managerial efforts of Apple the company. But when you buy Ether, from whose managerial efforts are you expecting a profit? pic.twitter.com/k8OnzcZplQ

— Rep. Ritchie Torres (@RepRitchie) September 18, 2024

Dan Gallagher, a former SEC commissioner, supported this view, noting that Ethereum lacks a direct corporate counterpart like Apple.

The SEC has recognized Ethereum’s non-security status by allowing eToro to continue trading it alongside Bitcoin and Bitcoin Cash.

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However, this decision resulted from a private settlement and does not set a legal precedent. SEC Chair Gary Gensler has avoided public commentary on Ethereum’s classification.

Gallagher, now the chief legal officer at Robinhood, revealed that despite numerous meetings and discussions with the SEC, his company still faced a Wells notice.

He criticized the SEC’s unresponsiveness and its aggressive stance, advocating for clearer regulatory guidelines for digital assets.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.