Crypto advocacy group Coin Center spelling out why it believes Ethereum (ETH) is not a security, despite claims to the contrary coming from New York Attorney General (NYAG) Letitia James.
In a new lawsuit against the crypto exchange Kucoin, Attorney General James arguesEthereum is a security that relies on the efforts of third-party developers to generate profits for its holders.
The Attorney General calls ETH “a speculative asset” and placed the leading smart contract platform in a group with the collapsed crypto project Terra (LUNA) and its algorithmic stablecoin TerraUSD (UST).
Coin Center’s director of communications Neeraj Agrawal refutes the NYAG’s assertions and says the think tank’s view on Ethereum remains unchanged.
“Obviously, we disagree with the NYAG’s argument that ETH is a security. Coin Center will be monitoring the case and if there’s an opportunity to weigh in, we will.”
In 2018, Coin Center published a blog post explaining why it believes Ethereum is not a security. The group argued that while Ethereum may have met one of the prongs of the Howey test when it was issued in 2014, ETH in its current form today is not a security.
Under the Howey framework, a transaction represents an “investment contract” if a person “invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter, sponsor or other third party.”
According to Coin Center, Ethereum in its current iteration is “too useful and too decentralized” and that ETH’s value does not rely on the efforts of a discernible third party to generate profits.
“The value of Ether and the functionality of the Ethereum network is not reliant on the [Ethereum] Foundation, rather it flows from the efforts of thousands of unaffiliated developers, miners, and users…
Conflating the pre-sale and the running network is confused analysis that could be misunderstanding the tech or the law or both.”
At time of writing, Ethereum is trading for $1,466.
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FAQs
According to Coin Center, Ethereum in its current iteration is “too useful and too decentralized” and that ETH's value does not rely on the efforts of a discernible third party to generate profits.
Why is Ethereum not a security? ›
By fining eToro for offering trading services for crypto assets offered and sold as securities—but allowing it to continue offering trading for Ethereum—the SEC appears to finally be conceding that Ethereum should not be treated as a security, at least without staking services.
Is Ethereum an asset or security? ›
Ether was initially classified as a security during its initial coin offering (ICO) but is generally not considered a security now due to its decentralized nature. Ether functions as a medium of exchange but does not meet the traditional definition of a currency.
Is Ethereum set to explode? ›
Experts acknowledge that Ethereum has a stable future due to several use cases and its unique blockchain, and there is a chance it may perform exceptionally well compared to Bitcoin. However, it is considered highly unlikely for Ethereum to surpass the price of Bitcoin.
Is Ethereum at risk? ›
Ethereum Is a Risk Asset
Like all cryptocurrencies, Ethereum is considered a high-risk investment. After reaching an all-time high of nearly $4,900 in November 2021, Ethereum is still down slightly from there.
What will happen if ETH becomes a security? ›
If Ethereum is marked a security, it would not mean the end for ETH trading. It could, however, introduce far more complexity and barriers that could affect its growth negatively.
Is Ethereum going to be a security? ›
Ethereum Is Not a Security
“The Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0,” the tweet by the company stated, adding: “This means that the SEC will not bring charges alleging that sales of ETH are securities transactions.”
Is Bitcoin or Ethereum a safer investment? ›
Buying either crypto requires a high risk tolerance. Looking at past performance, it's difficult to choose a winner between Bitcoin and Ether because their relative returns fluctuate depending on the time frame. In the past year, Bitcoin prices are up 157% compared to a 100% gain for Ether.
What is the underlying asset of Ethereum? ›
Ethereum is a decentralized blockchain with smart contract functionality. Ether (abbreviation: ETH) is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capitalization. It is open-source software.
Which coin under Ethereum? ›
Top Ethereum Blockchain Coins Today By Market Cap
| # | Name | 1H |
|---|
| 1 | Ethereum ( ETH ) | +0.25% |
| 2 | Tether ( USDT ) | 0.00% |
| 3 | BNB ( BNB ) | +0.37% |
| 4 | USDC ( USDC ) | -0.01% |
39 more rowsEthereum (ETH) Price Prediction Table
| Year | Average Price* | Percent Increase |
|---|
| 2024 | $2,560.74 | -% |
| 2025 | $4,242.93 | 100.00% |
| 2026 | $5,570.28 | 25.00% |
| 2027 | $6,971.88 | 20.00% |
8 more rowsEthereum Price Chart Forecast 2025
The weekly ETH chart highlights the most likely pattern to unfold in 2025. It starts with a retracement in 2024 so a cup and handle can be created. If ETH may fall to $2,550 which is the 38.2% retracement level which will be a super bullish evolution for Ethereum for 2025 & beyond.
What coin will skyrocket in 2024? ›
Which crypto will boom in 2024? Cryptos that could boom in 2024 include Render Token (a rendering network) and Solana. Bitcoin and Ethereum could also be poised for strong performances in 2024, thanks to the SEC's approval of Bitcoin ETFs and Ethereum ETFs.
Does the SEC think Ethereum is a security? ›
After declaring in 2018 that Ether is not a security, in 2023 the SEC secretly decided to claim power over this digital asset as a security and has been conducting an invalid investigation into Ethereum.
Is it safe to put money in Ethereum? ›
Comparing Ethereum with traditional investment options such as stocks, bonds, or even other cryptocurrencies is crucial for understanding its unique risk and reward profile. While Ethereum offers high growth potential, it also comes with higher volatility and risks, particularly regulatory and technological challenges.
Is it worth keeping Ethereum? ›
Crypto traders make money every day from changes in the Ethereum value. It is also worth investing in the ETH to receive passive income from staking. Developers need it to create projects on the blockchain, and ordinary users need it to pay for gas and use Web3 applications on the Ethereum blockchain.
Is Ethereum network secure? ›
Ethereum is a decentralized blockchain platform that establishes a peer-to-peer network that securely executes and verifies application code, called smart contracts. Smart contracts allow participants to transact with each other without a trusted central authority.
Is ether a security token? ›
But BTC and ETH are not designed to be used as security tokens, and there is no expectation of profits from the developers; they do not currently meet the criteria to be considered securities by the SEC.
Can Ethereum be trusted? ›
Is Ethereum secure? ETH is currently secured by the Ethereum blockchain using a technology called “proof of stake” (more on this below).
