If Ether’s Status Is Unclear After This Article, It’s Clearly A You Problem

Gary Gensler refuses to answer the question, so we’ve gathered all the clarity in one easy-to-read article

OPINION
article-image

Planet Crypto for Blockworks

share

Ether, the native token of the Ethereum blockchain, has been the subject of much discussion recently. While its status appeared to be settled by the SEC’s staff some time ago, the recent transition to a proof-of-stake consensus mechanism has apparently given the current SEC Chair, Gary Gensler, an opportunity to re-examine the token.

Gensler is adamant that the crypto industry has been given perfect clarity on such matters, and has repeatedly declared that the rules for what constitutes a security are absolutely clear, transparent, and not open to interpretation.

So, is Ether, or ETH, a security, a commodity, or something else?

Luckily we have gathered together all the experts who’ve clearly answered this thorny question, in Blockworks’ Ultimate Guide to Regulatory Clarity.™


William Hinman, Director of the Division of Corporate Finance at the SEC, June 2018: 

“Based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions.”


Letitia James, New York Attorney General, March 2023:

“The Tokens [including ETH] are securities because they each involve investments of money into a common enterprise with the expectation of profits due to the managerial efforts of the Tokens’ respective founders, developers, and management teams.”

Also Letitia James, New York Attorney General, March 2023:

“Under both state and federal authority, ETH, LUNA, and UST are commodities.”


Jay Clayton, Chair of the SEC, March 2019 (reinforcing Hinman, above):

“A digital asset may be offered and sold initially as a security because it meets the definition of an investment contract, but that designation may change over time if the digital asset later is offered and sold in such a way that it will no longer meet that definition.”


Rostin Behnam, Chair of the CFTC, May 2022:

“I can say for sure Bitcoin, which is the largest of the coins and has always been the largest regardless of the total market cap of the entire digital asset market capitalization, is a commodity. Ether as well. I have argued this before, my predecessors as well said it is a commodity.”


Gary Gensler, Chair of the SEC, April 2023 (refusing to answer the actual question):

“Ummm, I… I… it’s… actually all securities are commodities under the Commodity and Exchange Act, it’s that we’re excluded commodities, but I would agree that a security cannot also be an excluded commodity and an included commodity.”


Now it’s time for your multiple choice test. Based on the statements above, select one answer.

  1. Ether is not a security
  2. Ether is a security
  3. Ether is both a security and a commodity
  4. Ether was a security, but now it isn’t
  5. Ether is a commodity
  6. Gary Gensler is making it up as he goes along
  7. All of the above

Clear enough for you?


Thanks to Planet Crypto for this week’s illustration.

A version of this op-ed first appeared in Blockworks’ newsletter: Subscribe below.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.jpg

Research

Bluefin possibly stands at an inflection point. The token is near an all-time low yet the protocol’s spot volume market share and derivatives exchange usage have been increasing month over month since its November launch. Given its current market position and the upcoming upgrades (for both Bluefin and SUI), there may be upside potential before the increased supply growth in December. However, strong opposition from existing competitors (like Cetus and Suilend), as well as new entrants (like Aftermath), pose key challenges to Bluefin’s medium-term success.

article-image

Top Committee Democrat Sen. Elizabeth Warren in her opening statement accused Atkins of “helping billionaire CEOs like Sam Bankman-Fried”

article-image

Introducing garbled circuits for enhanced privacy and regulatory compliance

article-image

Ross Ulbricht was a freedom maximalist building freedom tech, powered by Bitcoin

article-image

Solana validators can reap benefits including payments, votes and community clout

article-image

Sponsored

WalletConnect is cementing itself as the essential connectivity layer, ensuring wallets remain the entry point for billions of users

article-image

According to a legal filing, Galaxy Digital helped boost the price of LUNA while quietly selling its tokens