SEC lacks grounds against ETH and valid reasons to reject Ethereum Spot ETF: Coinbase CLO

The United States Securities and Exchange Commission (SEC) has come under fire for its perceived lack of clarity regarding Ethereum (ETH). In a recent post on X, Coinbase's chief legal officer, Paul Grewal, challenged the SEC's position, arguing that the SEC does not have sufficient reasons to classify ETH as a security nor justifiable reasons to reject a spot Ethereum exchange-traded fund (ETF).

Grewal pointed to several key points about Ethereum, including the widespread adoption of ETH. According to him, classifying ETH as a security potentially impacts several US citizens.

The core argument is that "ETH is a commodity, not a security." Grewal believes Ethereum should not be classified as a security, which would put it under stricter SEC regulations.

In support of his argument, Grewal referenced statements from former SEC officials. He highlighted comments by William Hinman, the SEC's former Director of Corporation Finance, who previously declared, "ETH is not a security." Grewal also mentioned that SEC Chair Gary Gensler himself, before his appointment, had publicly stated that "ETH is not a security."

Grewal added that the Commodity Futures Trading Commission (CFTC) and federal courts have consistently classified ETH as a commodity. According to him, ETH futures contracts traded on CFTC-regulated exchanges demonstrate established regulatory acceptance of ETH as a commodity.