SEC Indicates Ethereum Not Classified as Security
The U.S. Securities and Exchange Commission (SEC) has recently made it clear that it does not consider Ethereum, the second-largest cryptocurrency, as a security. This decision was highlighted in a settlement between the SEC and the cryptocurrency trading platform eToro.
As part of the agreement reached with the SEC, eToro has agreed to cease trading activities involving most cryptocurrency assets, with the exception of Ethereum, Bitcoin, and Bitcoin Cash.
eToro will be paying a fine of $1.5 million as part of the settlement. The SEC accused eToro of violating Section 15(a) of the Exchange Act by functioning as a broker and a clearing agency. Additionally, eToro was alleged to have acted as a custodian and securities depository. Despite these allegations, the SEC did not pursue or settle any charges against eToro.
In a similar vein, last July, the Israeli investment platform decided to remove Dash (DAH), Algorand (ALGO), and other cryptocurrencies from its offerings after these assets were classified as securities by the SEC. Furthermore, in August 2023, eToro faced a lawsuit from the Australian markets regulator concerning its leveraged derivative contract, which allowed speculation on cryptocurrencies.
The SEC’s stance on Ethereum as a non-security marks a significant development in the regulatory landscape surrounding cryptocurrencies. This decision sheds light on the evolving regulatory environment in which digital assets operate, impacting both cryptocurrency trading platforms and investors.
The SEC’s actions and decisions regarding various cryptocurrencies, including Ethereum, reflect the ongoing efforts to define and regulate these assets within the existing legal framework. The settlement with eToro underscores the importance of compliance with securities regulations in the cryptocurrency space to ensure transparency and investor protection.
