Episode 31
Eight Years in the Making – ETH is a Commodity
By Selva Ozelli Esq, CPA Author of Sustainably Investing in Digital Assets Globally On April 29, 2018, I wrote about Ethereum's (ETH) decentralized nature [quoting a crypto industry founder Dr. Emin Gun Sirer] which qualified ETH as a commodity for US ...
Irish Tech News Audio Articles · Simon Cocking
April 1, 202615m 46s
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Show Notes
By Selva Ozelli Esq, CPA Author of Sustainably Investing in Digital Assets Globally
On April 29, 2018, I wrote about Ethereum's (ETH) decentralized nature [quoting a crypto industry founder Dr. Emin Gun Sirer] which qualified ETH as a commodity for US law purposes. The regulatory uncertainty, regarding whether ETH [and other digital assets] is classified as securities or commodities, has historically been a primary barrier to institutional capital adoption since it created legal risks, complicated custody, and hampered compliance, causing investors to hold back in investing.
Why Ethereum's (ETH) has finally evolved into a commodity
To remove a major cloud over whether the second most traded digital asset ETH after Bitcoin (BTC) was a security or a commodity on June 14, 2018, former the Securities Exchange Commission (SEC) Director of Corporation Finance William Hinman suggested that ETH in its current decentralized state did not constitute a security, providing temporary regulatory clarity on its legal classification as a commodity.
Litigation to Determine ETH's Legal Classification
Nevertheless, in the absence of authoritative regulatory certainty from the SEC or the Commodity Futures Trading Commission (CFTC), lawsuits challenged whether ETH [and other digital assets] was a regulated security or a commodity.
NYAG vs. KuCoin (2023): The New York Attorney General (NYAG) filed a lawsuit against crypto trading platform KuCoin a major global cryptocurrency exchange serving over 40 million users in more than 200 countries with a massive selection of over 1,000 digital assets and extensive feature set, including spot, futures, margin trading, and automated bots, alleging it failed to register as a broker-dealer and, in a landmark claim, that ETH is a security under the Martin Act (New York's anti-fraud law).
SEC vs. Lido/Rocket Pool (2024) Developers: In 2024, the SEC took significant legal action involving Lido and Rocket Pool by filing a lawsuit against their primary distribution partner, While not targeting ETH itself, the SEC charged developers of liquid staking protocols (stETH/rETH) with selling unregistered securities, highlighting regulatory concern over staking services.
In February 2025, under new leadership, the SEC dropped its lawsuit. On August 5, 2025, the SEC issued a staff statement clarifying that liquid staking activities generally do not involve the offer and sale of securities. The SEC now views liquid staking providers as performing "administrative" or "ministerial" functions rather than "managerial" work, meaning they act merely as agents for the depositors. While general staking is deemed ministerial, "staking receipt tokens" (liquid staking) are considered securities if the underlying asset is a security. The potential for a "staked-as-standard" approach could boost Ethereum's utility, particularly if the Clarity Act leads to tighter regulations or caps on stablecoin yields.
Consensys vs. SEC (2024): Consensys sued the SEC, challenging its authority to investigate or regulate ETH, arguing that the SEC's efforts to label it a security are a "regulatory overreach". This was triggered by a Wells Notice regarding MetaMask. The SEC notified Consensys that it would close its investigation into Ethereum 2.0, deciding not to bring an enforcement action alleging that ETH is a security.
CFTC v. Ikkurty (2024) ETH, BTC, OHM and Klima were ruled to be commodities under the Commodity Exchange Act. This decision, part of a fraud case, provided significant legal precedent backing the CFTC's authority over crypto spot markets, distinguishing it from security classification.
The SEC & CFTC Issued Clarity on Digital Asset Classification & Regulation
Eight years after I wrote my article concerning the classification of ETH for US law purposes, on March 17, 2026, the SEC and CFTC finally issued a landmark joint interpretation providing the most comprehensive regulatory clarity for digital assets to date resolving the uncerta...
On April 29, 2018, I wrote about Ethereum's (ETH) decentralized nature [quoting a crypto industry founder Dr. Emin Gun Sirer] which qualified ETH as a commodity for US law purposes. The regulatory uncertainty, regarding whether ETH [and other digital assets] is classified as securities or commodities, has historically been a primary barrier to institutional capital adoption since it created legal risks, complicated custody, and hampered compliance, causing investors to hold back in investing.
Why Ethereum's (ETH) has finally evolved into a commodity
To remove a major cloud over whether the second most traded digital asset ETH after Bitcoin (BTC) was a security or a commodity on June 14, 2018, former the Securities Exchange Commission (SEC) Director of Corporation Finance William Hinman suggested that ETH in its current decentralized state did not constitute a security, providing temporary regulatory clarity on its legal classification as a commodity.
Litigation to Determine ETH's Legal Classification
Nevertheless, in the absence of authoritative regulatory certainty from the SEC or the Commodity Futures Trading Commission (CFTC), lawsuits challenged whether ETH [and other digital assets] was a regulated security or a commodity.
NYAG vs. KuCoin (2023): The New York Attorney General (NYAG) filed a lawsuit against crypto trading platform KuCoin a major global cryptocurrency exchange serving over 40 million users in more than 200 countries with a massive selection of over 1,000 digital assets and extensive feature set, including spot, futures, margin trading, and automated bots, alleging it failed to register as a broker-dealer and, in a landmark claim, that ETH is a security under the Martin Act (New York's anti-fraud law).
SEC vs. Lido/Rocket Pool (2024) Developers: In 2024, the SEC took significant legal action involving Lido and Rocket Pool by filing a lawsuit against their primary distribution partner, While not targeting ETH itself, the SEC charged developers of liquid staking protocols (stETH/rETH) with selling unregistered securities, highlighting regulatory concern over staking services.
In February 2025, under new leadership, the SEC dropped its lawsuit. On August 5, 2025, the SEC issued a staff statement clarifying that liquid staking activities generally do not involve the offer and sale of securities. The SEC now views liquid staking providers as performing "administrative" or "ministerial" functions rather than "managerial" work, meaning they act merely as agents for the depositors. While general staking is deemed ministerial, "staking receipt tokens" (liquid staking) are considered securities if the underlying asset is a security. The potential for a "staked-as-standard" approach could boost Ethereum's utility, particularly if the Clarity Act leads to tighter regulations or caps on stablecoin yields.
Consensys vs. SEC (2024): Consensys sued the SEC, challenging its authority to investigate or regulate ETH, arguing that the SEC's efforts to label it a security are a "regulatory overreach". This was triggered by a Wells Notice regarding MetaMask. The SEC notified Consensys that it would close its investigation into Ethereum 2.0, deciding not to bring an enforcement action alleging that ETH is a security.
CFTC v. Ikkurty (2024) ETH, BTC, OHM and Klima were ruled to be commodities under the Commodity Exchange Act. This decision, part of a fraud case, provided significant legal precedent backing the CFTC's authority over crypto spot markets, distinguishing it from security classification.
The SEC & CFTC Issued Clarity on Digital Asset Classification & Regulation
Eight years after I wrote my article concerning the classification of ETH for US law purposes, on March 17, 2026, the SEC and CFTC finally issued a landmark joint interpretation providing the most comprehensive regulatory clarity for digital assets to date resolving the uncerta...