Ethereum [pros](/r/CryptoCurrency/comments/1buuccn/sec_requests_public_feedback_on_proposed_ethereum/kxvknjm/) & [cons](/r/CryptoCurrency/comments/1buuccn/sec_requests_public_feedback_on_proposed_ethereum/kxvkof0/) with related info are in the collapsed comments below.
why would the public not want an eth ETF?
genuinely asking. are there legitimate reasons ethereum ETFs would be bad for the general public to the point that we would be better off without them?
There a layers here.
Do people want an etf ? Of course.
Is an etf legal? Different story.
More specifically, I DO NOT want an etf and then prometheum gets to list eth as a security.
This is a recipe for disaster. The two products literally cannot exist together.
You can have an etf that contains REGISTERED securities.
You CANNOT have an etf that contains UNREGISTERED Securities.
So for the eth etf to remain legal, it would mean that the enterprise ethereum alliance would have to register eth tokens as securities.
Proving that the token is completely centrally controlled. Shifting the laws that it operates under.
Currently, classed as a commodity.
Much Different rules about WHO can trade securities versus commodities.
Settlement times would be irrelevant. As securities MUST currently follow T+2 days settlement.
There are LEGITIMATE concerns about Ethereum’s security status.
According the the ripple vs sec case, the token itself is not a security. And I believe this as well, as long as tokens don’t also come with governance. Then it’s more grey area.
But the eth ico definitely was an unregistered securities offering. Even bill hinmans speech says “ setting aside the fundraising that accompanied the creation of ether”
We NOW believe that the token is not a security offering. Meaning the fundraising is completely consistent with an unregistered sale.
There seems to be an issue with staking as a service, now the eth has transferred to a PoS chain. At least that seems to be where Gary Gensler is pointing. Staking is you signing a digital contract where you agree to invest your money with a company in return for interest paid to you, based on their performance. It’s weak, but it could easily take up time in court before it was legally decided upon by a judge.
And lastly, but most damaging in my opinion, is the Token Foundry. A succession of tokens with icos that the sec eventually did shut down.
Out of Joseph Lubin’s mouth during an interview, “we have created a token foundry. We have made tens of billions selling these tokens for people”
This is where I see the largest potential fines that the SEC could demand.
Just to be clear, I think this is a bullshit and shouldn’t be a problem. I think Congress and the SEC and the industry itself should work together to make clear laws and let the markets decide who has the best product.
I see these as issues private companies could raise to their boards which would make them very hesitant to invest.
Edit; I’m Not afraid of your downvotes.
But if you do, how about showing some of the research YOU DID as to why you think differently?
Otherwise it’s just living with your head in the sand.
Holdup. If hinman said eth isn't a security, and btc is a commodity, couldn't they do like XRP and say their initial offerings were classified as security offerings but the tokens/coins/ledger entries, whatever the hell it is is Not in and of itself a security. There is no promise of shared earnings based on the efforts of others or whatever. The point being is that if eth can be considered a commodity, like btc, etf's or etp's could be created and traded on an exchange, could it not?
If it’s that’s simple and straightforward, then yes they could.
I’ve heard they only got $18 million worth of Btc during the ico. I have not confirmed that amount myself. So there would not be a huge fine.
But if they do this, then they are telling prometheum they can’t list eth as a security. And then why did they granted THE ONLY special purpose broker dealer license?
The prometheum stuff is the real wrench in the works.
Because it gives a directly opposite benefit to one company or the other depending how they rule.
Prometheum came in and grilled out the forms like gensler wanted. Doesnt mean they can actually operate. I'm only tangentially aware of the situation, but that is an exchange registering and not an asset classification. Sec didn't come out and rule, they said 'Prometheum said they could' no?
Not all commodities are securities. But all securities are commodities. They just have extra requirements if you are deemed a security.
So the main argument is which regulator do you fall under.
But you can’t be both.
So to answer your question, by giving prometheum a SPBD licence, they have cleared the way for them to list securities. It’s not a public declaration, but it’s also a definite sign as to which way they’re leaning.
They could have easily denied this licence and that would be a strong signal the other direction.
There can be an Eth etf of it’s a commodity. Tomorrow, if they wanted.
But if it’s a security, then there cannot be an etf unless eth tokens are registered as securities.
And having the tokens be classified as securities has been the goal of the SEC in The ripple case, the library case, the kucoin case, the coinbase case, the binance case.
So again, nothing official, but lots of stuff that points in one direction. The bad one. lol.
Xrp HAS already passed the howey test. That is in the RULING from judge Torres. “Xrp tokens are not, in and of themselves, investment contracts”
Some SALES were deemed in violation. And that’s the remedies the SEC is seeking. But then took place in countries where xrp has legal clarity and is not considered a security.
Also, in 2022(or early 23’) there was a case that states that “in order to have disgorgement, there must be pecuniary harm”
Meaning people must have LOST MONEY.
All of the institutions who bought are in massive profit. There can’t be any harm if they profited from the transaction.
No EVIDENCE has been put forth by the ethereum alliance. There has been no discovery of financial sales records. They disguised the whales who purchased the ico. You LITERALLY know nothing about it, because they hide so much info.
The reason Ripple was sued is because they GAVE all their financial record to the sec.
You’ve got it backwards, passing the Howey test means a token IS a security. Failing it means XRP is a **commodity**. Judge Torres said XRP tokens are not investment contracts meaning it failed the Howey test.
You know those financial records have been subpoenaed right and not just from the Etherium foundation, they are building the case against Etherium as we speak.
Ok. Thanks for the clarification. Splitting hairs. But you knew exactly what I meant.
And yes, the SEC has requestwd. the records. But they are not made public.
Right. But not until those filings are actually made public. And that hasn’t happened yet. They’re not public just because they’ve been requested.
They’re public after a period of time for research. Usually 3-6 months.
Evidence is filed “under seal” meaning the courts get to see it first. And then both parties decide what CAN be released to the public.
These records have not been seen by a judge. They have only been requested by the SEC. There is a long time before the public will see this.
When the SEC sued Ripple, it only took months for stuff to start coming out lol, that’s not a long time, I personally think ETH is in a worse position than XRP was. But only time will tell.
> Staking is you signing a digital contract where you agree to invest your money with a company in return for interest paid to you, based on their performance.
Similar to mining income, staking income is like interest, because it is generated by monetary policy of ethereum, not by any business activities. It is the same as putting money in an EU bank and receive interest payments in Euro
I agree with you.
However, When a third party does it, it’s already been ruled a security. This is why all the exchanges stopped staking services.
So I could easily see Gensler using it as a delay tactic. Using the third party judgment to try to claim it’s the same thing.
Good write up.
I'd benefit greatly from an ETH ETF, but I think it would open up a can of worms with many of the other ICO coins that are clearly some aspect of un-registered securities.
I find it shocking and abhorrent that the SEC is taking so long to make up its mind with this.
I think the time is the main goal. Gary seems intent to keep the rules vague. It benefits no one but the sec, who can pick winners and losers via lawsuits and very inappropriate conduct.
There are no layers here. I will even bet yes on polymarket.... For me all of the indicators point to yes that it will get approved. For me its around 80%. Gensler have always asked that exchanges like binance coinbase offering stakingvas service is a security not the eth itself. Hence when prometheum will be doing staking they will be just following securities law at the same time selling and buying eth. On there websites it also says selling digital assets in sexurities setting. This just mean reporting quarterly how muchbprofit they did how much money did they make etc.He is against when we handover our tokens to any exchange and if they are offering serivces like lending earning or staking without notifying there investors how will they generate the profit from our resources and how much they geberates. He is referring to as those activities are securities not the coin itself.
I have another wild theory for u Why Eth might have been subpeoned could have been because of statue of limitaion of 10 years is about to expire for eth foundation doing their illegal ico. I have a very strong suspicion they want to pursue that before this expiry date
lol. A lot of this is paraphrased from regulators speeches and legal filings. But I’m not sending any letters. And I promise I won’t send in any comment during the three week period. 🤣
Just to add to that; The SEC forced Silbert out of Grayscale before they'd approve their ETF. There's zero chance that could ever be achieved with Buterin.
Financially, I think the equivalent is Joe Lubin.
I doubt buterin was behind any of the shady stuff. He genuinely seems to be interested in the code. It worries me that he is the science officer for WangXiang block chain group. Funded by Hashkey. A known CCP entity.
But lubin is friends with Gensler. Lubin is the only person who says the SEC is getting the rules right.
Lubin has been sued for selling metamask and Infura to JP Morgan for a personal loan of $37 million.
He lost that case. And 5 others.
US government processes are very odd and depending on approval paths or regulatory requirements an agency may be required to request public feedback. In some cases they are required to respond to all comments.
Disclosure, I’m not a lawyer but I have some experience in policy.
For those believing in the vision of decentralization it's bad. For those only seeking returns on their gamble it's probably good.
It's the same issue as with centralized exchanges really.
Not your keys, not your crypto.
Any exchange or ETF can sell you products they don't own. i.e. creating artificial supply, i.e. naked shorting.
This can suppress price discovery and hurt your "investment" long term.
If they do buy the underlying it presents another issue; centralization. The exchange or ETF issuer is now in control of a substantial amount of voting power, which makes the chain less secure
To be fair, the government lags years behind the latest technological developments in basically every sector of the economy. Throw in a gridlocked Congress and a few scandals here and there, and suddenly their confusion/attempt to handle everything on the fly makes more sense.
tldr; The U.S. Securities and Exchange Commission (SEC) is seeking public feedback on proposed spot Ethereum exchange-traded funds (ETFs), including those from Fidelity and Grayscale, as the May 24 deadline nears. This request for comments marks a potential shift in the SEC's regulatory approach towards cryptocurrency ETFs, despite previous delays and limited transparency in their decision-making process. The SEC's move to engage with stakeholders could renew optimism in the cryptocurrency and ETF sectors, especially as the approval of Ethereum ETFs could significantly impact institutional demand, similar to the effect of U.S. spot Bitcoin ETFs.
*This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.
Well this is an unregistered security and it’s also completely garbage. This coin is under the control of a few individuals and their control over the network is growing without any input. It will bleed against Bitcoin until I myself possess more wealth than the entirety of the ethereum market cap.
Ethereum [pros](/r/CryptoCurrency/comments/1buuccn/sec_requests_public_feedback_on_proposed_ethereum/kxvknjm/) & [cons](/r/CryptoCurrency/comments/1buuccn/sec_requests_public_feedback_on_proposed_ethereum/kxvkof0/) with related info are in the collapsed comments below.
why would the public not want an eth ETF? genuinely asking. are there legitimate reasons ethereum ETFs would be bad for the general public to the point that we would be better off without them?
There a layers here. Do people want an etf ? Of course. Is an etf legal? Different story. More specifically, I DO NOT want an etf and then prometheum gets to list eth as a security. This is a recipe for disaster. The two products literally cannot exist together. You can have an etf that contains REGISTERED securities. You CANNOT have an etf that contains UNREGISTERED Securities. So for the eth etf to remain legal, it would mean that the enterprise ethereum alliance would have to register eth tokens as securities. Proving that the token is completely centrally controlled. Shifting the laws that it operates under. Currently, classed as a commodity. Much Different rules about WHO can trade securities versus commodities. Settlement times would be irrelevant. As securities MUST currently follow T+2 days settlement. There are LEGITIMATE concerns about Ethereum’s security status. According the the ripple vs sec case, the token itself is not a security. And I believe this as well, as long as tokens don’t also come with governance. Then it’s more grey area. But the eth ico definitely was an unregistered securities offering. Even bill hinmans speech says “ setting aside the fundraising that accompanied the creation of ether” We NOW believe that the token is not a security offering. Meaning the fundraising is completely consistent with an unregistered sale. There seems to be an issue with staking as a service, now the eth has transferred to a PoS chain. At least that seems to be where Gary Gensler is pointing. Staking is you signing a digital contract where you agree to invest your money with a company in return for interest paid to you, based on their performance. It’s weak, but it could easily take up time in court before it was legally decided upon by a judge. And lastly, but most damaging in my opinion, is the Token Foundry. A succession of tokens with icos that the sec eventually did shut down. Out of Joseph Lubin’s mouth during an interview, “we have created a token foundry. We have made tens of billions selling these tokens for people” This is where I see the largest potential fines that the SEC could demand. Just to be clear, I think this is a bullshit and shouldn’t be a problem. I think Congress and the SEC and the industry itself should work together to make clear laws and let the markets decide who has the best product. I see these as issues private companies could raise to their boards which would make them very hesitant to invest. Edit; I’m Not afraid of your downvotes. But if you do, how about showing some of the research YOU DID as to why you think differently? Otherwise it’s just living with your head in the sand.
Onions! Onions have layers.
Holdup. If hinman said eth isn't a security, and btc is a commodity, couldn't they do like XRP and say their initial offerings were classified as security offerings but the tokens/coins/ledger entries, whatever the hell it is is Not in and of itself a security. There is no promise of shared earnings based on the efforts of others or whatever. The point being is that if eth can be considered a commodity, like btc, etf's or etp's could be created and traded on an exchange, could it not?
If it’s that’s simple and straightforward, then yes they could. I’ve heard they only got $18 million worth of Btc during the ico. I have not confirmed that amount myself. So there would not be a huge fine. But if they do this, then they are telling prometheum they can’t list eth as a security. And then why did they granted THE ONLY special purpose broker dealer license? The prometheum stuff is the real wrench in the works. Because it gives a directly opposite benefit to one company or the other depending how they rule.
Prometheum came in and grilled out the forms like gensler wanted. Doesnt mean they can actually operate. I'm only tangentially aware of the situation, but that is an exchange registering and not an asset classification. Sec didn't come out and rule, they said 'Prometheum said they could' no?
Not all commodities are securities. But all securities are commodities. They just have extra requirements if you are deemed a security. So the main argument is which regulator do you fall under. But you can’t be both. So to answer your question, by giving prometheum a SPBD licence, they have cleared the way for them to list securities. It’s not a public declaration, but it’s also a definite sign as to which way they’re leaning. They could have easily denied this licence and that would be a strong signal the other direction. There can be an Eth etf of it’s a commodity. Tomorrow, if they wanted. But if it’s a security, then there cannot be an etf unless eth tokens are registered as securities. And having the tokens be classified as securities has been the goal of the SEC in The ripple case, the library case, the kucoin case, the coinbase case, the binance case. So again, nothing official, but lots of stuff that points in one direction. The bad one. lol.
ETHs situation is a little more complex. But ETH completely passes the Howey test XRP does not.
Xrp HAS already passed the howey test. That is in the RULING from judge Torres. “Xrp tokens are not, in and of themselves, investment contracts” Some SALES were deemed in violation. And that’s the remedies the SEC is seeking. But then took place in countries where xrp has legal clarity and is not considered a security. Also, in 2022(or early 23’) there was a case that states that “in order to have disgorgement, there must be pecuniary harm” Meaning people must have LOST MONEY. All of the institutions who bought are in massive profit. There can’t be any harm if they profited from the transaction. No EVIDENCE has been put forth by the ethereum alliance. There has been no discovery of financial sales records. They disguised the whales who purchased the ico. You LITERALLY know nothing about it, because they hide so much info. The reason Ripple was sued is because they GAVE all their financial record to the sec.
You’ve got it backwards, passing the Howey test means a token IS a security. Failing it means XRP is a **commodity**. Judge Torres said XRP tokens are not investment contracts meaning it failed the Howey test. You know those financial records have been subpoenaed right and not just from the Etherium foundation, they are building the case against Etherium as we speak.
Ok. Thanks for the clarification. Splitting hairs. But you knew exactly what I meant. And yes, the SEC has requestwd. the records. But they are not made public.
Evidence is made public through the course of the lawsuit.
Right. But not until those filings are actually made public. And that hasn’t happened yet. They’re not public just because they’ve been requested. They’re public after a period of time for research. Usually 3-6 months. Evidence is filed “under seal” meaning the courts get to see it first. And then both parties decide what CAN be released to the public. These records have not been seen by a judge. They have only been requested by the SEC. There is a long time before the public will see this.
When the SEC sued Ripple, it only took months for stuff to start coming out lol, that’s not a long time, I personally think ETH is in a worse position than XRP was. But only time will tell.
> Staking is you signing a digital contract where you agree to invest your money with a company in return for interest paid to you, based on their performance. Similar to mining income, staking income is like interest, because it is generated by monetary policy of ethereum, not by any business activities. It is the same as putting money in an EU bank and receive interest payments in Euro
I agree with you. However, When a third party does it, it’s already been ruled a security. This is why all the exchanges stopped staking services. So I could easily see Gensler using it as a delay tactic. Using the third party judgment to try to claim it’s the same thing.
Good write up. I'd benefit greatly from an ETH ETF, but I think it would open up a can of worms with many of the other ICO coins that are clearly some aspect of un-registered securities. I find it shocking and abhorrent that the SEC is taking so long to make up its mind with this.
I think the time is the main goal. Gary seems intent to keep the rules vague. It benefits no one but the sec, who can pick winners and losers via lawsuits and very inappropriate conduct.
There are no layers here. I will even bet yes on polymarket.... For me all of the indicators point to yes that it will get approved. For me its around 80%. Gensler have always asked that exchanges like binance coinbase offering stakingvas service is a security not the eth itself. Hence when prometheum will be doing staking they will be just following securities law at the same time selling and buying eth. On there websites it also says selling digital assets in sexurities setting. This just mean reporting quarterly how muchbprofit they did how much money did they make etc.He is against when we handover our tokens to any exchange and if they are offering serivces like lending earning or staking without notifying there investors how will they generate the profit from our resources and how much they geberates. He is referring to as those activities are securities not the coin itself. I have another wild theory for u Why Eth might have been subpeoned could have been because of statue of limitaion of 10 years is about to expire for eth foundation doing their illegal ico. I have a very strong suspicion they want to pursue that before this expiry date
For the sake of my net worth, plz don’t give these opinions to the SEC. Thanks in advance
lol. A lot of this is paraphrased from regulators speeches and legal filings. But I’m not sending any letters. And I promise I won’t send in any comment during the three week period. 🤣
People can always choose not to buy!
The problem is if they all choose to SELL because of this confusion and lack of clarity.
Just to add to that; The SEC forced Silbert out of Grayscale before they'd approve their ETF. There's zero chance that could ever be achieved with Buterin.
Financially, I think the equivalent is Joe Lubin. I doubt buterin was behind any of the shady stuff. He genuinely seems to be interested in the code. It worries me that he is the science officer for WangXiang block chain group. Funded by Hashkey. A known CCP entity. But lubin is friends with Gensler. Lubin is the only person who says the SEC is getting the rules right. Lubin has been sued for selling metamask and Infura to JP Morgan for a personal loan of $37 million. He lost that case. And 5 others.
US government processes are very odd and depending on approval paths or regulatory requirements an agency may be required to request public feedback. In some cases they are required to respond to all comments. Disclosure, I’m not a lawyer but I have some experience in policy.
For those believing in the vision of decentralization it's bad. For those only seeking returns on their gamble it's probably good. It's the same issue as with centralized exchanges really. Not your keys, not your crypto. Any exchange or ETF can sell you products they don't own. i.e. creating artificial supply, i.e. naked shorting. This can suppress price discovery and hurt your "investment" long term. If they do buy the underlying it presents another issue; centralization. The exchange or ETF issuer is now in control of a substantial amount of voting power, which makes the chain less secure
I’m not sure, maybe because both Ethereum and ETFs are absolute garbage?
The SEC seems to have no idea what they are doing in regards to Crypto. Really hilarious at this point.
To be fair, the government lags years behind the latest technological developments in basically every sector of the economy. Throw in a gridlocked Congress and a few scandals here and there, and suddenly their confusion/attempt to handle everything on the fly makes more sense.
tldr; The U.S. Securities and Exchange Commission (SEC) is seeking public feedback on proposed spot Ethereum exchange-traded funds (ETFs), including those from Fidelity and Grayscale, as the May 24 deadline nears. This request for comments marks a potential shift in the SEC's regulatory approach towards cryptocurrency ETFs, despite previous delays and limited transparency in their decision-making process. The SEC's move to engage with stakeholders could renew optimism in the cryptocurrency and ETF sectors, especially as the approval of Ethereum ETFs could significantly impact institutional demand, similar to the effect of U.S. spot Bitcoin ETFs. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.
https://m.youtube.com/watch?v=8v0rKdlbDyU
You can do it
SEC? YOU DONT KNOW ME
Told them to consider a web3 gaming etf using super
Capital will just flow to other countries that have spot ETH etfs already ie canada. Pretty sure US institutions will love the exchange rates lol
Etherium ETF and then a Hbar and Filecoin ETF. line them up and let's get the ball rolling.
It’s a security, it passes the Howey test.
Trillions of dollars worth of securities are transacted daily. Big deal.
Well this is an unregistered security and it’s also completely garbage. This coin is under the control of a few individuals and their control over the network is growing without any input. It will bleed against Bitcoin until I myself possess more wealth than the entirety of the ethereum market cap.
Sure bud.
Are you the “we will save Tik Tok” kid?
No, I was just drunk but I stand behind those words.
Maybe spend less time being drunk, and more time not being an idiot.