Coinbase founder and CEO Brian Armstrong is saying that Ethereum (ETH) is a commodity under US federal law just like Bitcoin (BTC).
The classification is an important one as the U.S. Securities and Exchange Commission (SEC) is considering several applications to launch ETH exchange-traded funds (ETFs). The SEC approved ETFs for Bitcoin earlier this year.
Armstrong says in a new Bloomberg interview that the SEC should approve the ETH ETFs without delay given the fact that they approved the BTC ETFs. However, according to Armstrong, there remains a conflict among federal agencies over whether to classify ETH as a security, which could complicate the application process.
Says Armstrong,
“I think the Ethereum ETFs very clearly should be approved, and everybody deserves equal treatment under the law. Unfortunately, some of this crypto stuff has gotten a little bit politicized at our federal agencies. And there’s unfortunately this kind of turf war between the CFTC (U.S. Commodity Futures Trading Commission) and the SEC about whether is it a commodity, is it a security, etc.
And I think the facts are pretty clear that Ethereum is a commodity, but that’s not going to stop folks from trying to throw a wrench into things.”
Gary Gensler, SEC chair, has not said whether he believes ETH is a security, but he has suggested many digital assets besides Bitcoin could be deemed securities. Meanwhile, the CFTC has indicated ETH is a commodity.
Armstrong says that it may ultimately come down to the courts, similar to the way it did for Bitcoin ETFs. In August, a court ruled that the SEC behaved in an “arbitrary and capricious” fashion when it rejected Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into a spot ETF. Gensler cited the ruling as a critical factor in the approval of the spot Bitcoin ETF applications.
Says Armstrong,
“If it does get delayed unfairly, I think the industry will have to follow a similar path to what happened with Bitcoin, which is they’ll essentially go to the courts and the courts will compel the regulators to follow the rules, follow the law and give equal treatment under the law. So it may take additional effort, but I think they really should be approved right away.”
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