Why does the SEC avoid taking action against Ethereum when all else are fair game?

The U.S. Securities and Exchange Commission (SEC) filed suit against Binance today in a move that has rocked the cryptocurrency industry. 

The complaint notably includes language in which the SEC clearly elucidates that it considers many of the tokens that traded on Binance to be unregistered securities and lays out its case against several it considers notable offenders. The SEC identifies these “crypto asset securities” as including (but not limited to) Solana, Cardano, Polygon, Filecoin, Cosmos, The Sandbox, Decentraland, Algorand, Axie Infinity, and Coti. 

Today’s filing contains some of the SEC’s most explicit language to date in clarifying its judgment, but once again avoids taking on the big question: is Ethereum a security or not? If so, why is the SEC silent on it? And if not, what is it?

“Crypto Asset Securities”

The SEC’s argument for designating these tokens as “crypto asset securities” is exhaustively outlined in Section VIII of the complaint (pages 85 through 123). Notable patterns emerge from the filing: the process of initial coin offerings (ICOs), vesting of tokens, allocations for the core team, and the promotion of profit generation through ownership of these tokens, are all repeated themes. 

But Ethereum is not listed among these. Gensler has remained consistently vague on the question of whether Ethereum and its namesake coin count as securities. ETH is commonly held as an investment, suggesting it could be classified as a security, but it is also extensively used day-to-day as a medium of exchange across protocols, making its function more akin to cash or ACH settlement. 

Gensler has previously suggested that “everything other than Bitcoin” in the crypto space could be seen as a security, but has notably refused to clearly state as much about Ethereum. When pressed to say the words, “I believe Ethereum is a security,” the Hon. Chair just will not do it. Gensler’s reluctance to classify Ether is curious when his SEC…