The SEC has no jurisdiction to regulate ether. The SEC’s regulatory powers are limited to securities, not commodities. Ether is a commodity, as confirmed by the CFTC, and the Ethereum blockchain is an internet protocol, not an investment scheme. As recently as October 2023, the SEC endorsed the CFTC’s classification of ether as a commodity by green-lighting ether ETFs tied to commodity futures that are regulated by the CFTC. This action by the SEC not only underscores the legal status of these ether futures contracts but also affirms ether’s standing as a commodity, aligning with the CFTC’s view. While ether is a commodity in which one can invest (like oil), it has far broader technological applications relating to the Ethereum blockchain.
The problem is, although the SEC affirmed the CFTC’s view of ether by publicly approving the ETFs in October 2023, in private the SEC has secretly been building an enforcement action to assert that ether is a security. It is taking two completely contradictory positions.
Furthermore, the SEC has also been covertly building a case to shut down applications that people around the globe rely upon to access and use the Ethereum blockchain – such as our MetaMask wallet. We aim to show that MetaMask is not a securities intermediary (i.e., a broker).
The facts are clear, the SEC has no jurisdiction to regulate Ether (a commodity), software interfaces built on Ethereum, or the Ethereum blockchain in general. Its attempt to do so is just the latest case of aggressive regulatory overreach by the agency, with the SEC trying to impose its own politicized agenda onto sectors far beyond U.S. capital markets.