Yahya 
The recent approval of spot Ether (ETH) exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC) has stirred significant discussion among industry analysts and legal experts. This move is seen by many as an implicit recognition that Ether is not a security. Bloomberg ETF analyst James Seyffart highlighted this perspective in a discussion with Ryan Sean Adams on the Bankless podcast, stating, “These are commodities-based trust shares, so the SEC, by approving these, is explicitly saying they’re not going to go after Ether as a security.”
Potential Implications for Other Tokens
Digital asset lawyer Justin Browder suggested that if Ether ETFs receive S-1 approval, the debate on whether ETH is a security would be conclusively settled. “If Ether ETFs get S-1 approval—the final piece needed for them to begin trading—then the debate is over: ETH is not a security” Browder asserted. Adam Cochran, a partner at venture capital firm Cinneamhain Ventures, took this further, proposing that this recognition of Ether as a commodity could extend to other digital assets. “ETH is a commodity, even with its current attributes. That means we can extrapolate to A LOT of other projects what elements matter in security,” Cochran explained, suggesting that many projects might now be viewed as commodities.
Staking and Regulatory Actions
Despite this positive outlook for Ether and potentially other tokens, analysts warn that the SEC may still target actors involved in staking Ether. Seyffart expressed, “I think they will] try to thread this needle and say ETH itself, they’re not going to call a security but staked ETH might be a security […] and I don’t believe they’re going to give that up any time soon.” Digital asset lawyer Joe Carlasare echoed this sentiment, noting that the SEC could continue to pursue individual actors and staking services even with the ETF approval.
The SEC’s recent actions support this caution. In April, Ethereum infrastructure firm Consensys received a Wells notice from the SEC, focusing on Metamask’s trading and staking services. Finance lawyer Scott Johnsson also pointed out that the SEC’s approval order for Ether ETFs did not explicitly confirm Ether’s non-security status, indicating that the regulatory body might still address this issue in the future.
The SEC approved 19b-4 applications from several major firms, including VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise, to issue spot Ether ETFs on May 23. However, these issuers need the SEC to sign off on their S-1 registration statements before launching their ETFs. Notably, Hashdex was the only issuer that did not receive approval on the same day, underscoring the ongoing complexities in the regulatory landscape.