• According to Hodl law, investors and traders who think ETH is safe are engaging in deliberate ignorance.
• The latest court ruling creates uncertainty around Ethereum as SEC is reported to view the asset as a security

It can be recalled that Hodl Law, a law firm dedicated to unique issues of digital assets and cryptocurrency, in a case in which the US Securities and Exchange Commission was a defendant, sought declarative relief from the court that engaging in transaction activity on the Ethereum network using Ether DCU does not implicate the securities Act of 1933. On February 6, 2023, SEC filed a motion to dismiss for lack of subject matter jurisdiction. 

According to the latest report, the complaint for declaratory relief filed on November 21, 2022, has been dismissed as the court grants SEC’s Motion. According to Hodl, the decision was procedural and not on merits. 

The recent case against Ripple triggered rumors that the Commission was protecting Ethereum. However, its recent refusal to comment on Ethereum in addition to the position it took in this briefing shows that it considers Ethereum as security. This means the Commission is looking at the appropriate time to strike as claimed by the law firm. 

According to Hodl, they presented Hinman’s speech document to the court, and the decision was that the court does not support the Plaintiff’s conclusion that the SEC has formally adopted the position that the Ether Network and Ether DCUs are not securities. 

Hodl on the Current Security Status of ETH 

According to the court, SEC has not issued a  definitive statement in this motion. While admitting that the SEC’s failure to issue clear guidance on the security status of Ethereum creates insecurities among users, “its uncertainty shows why the controversy is uncertain at its best.”

Hodl, from this ruling, has issued a caution to users that dealing in ETH is not safe.

So now, if you believe Ethereum is safe you are engaging in deliberate ignorance. What is next for us? There are appellate options as well as constitutional grounds (which the Court did not address [p.8n.1]). There are other litigation avenues in the works that we can’t get into here. But we will keep it. providing expert legal counsel to our business clients as well as for those individuals we represent that have been hurt and taken advantage of in the crypto space. Please give us a follow and keep watching, there is always more to come!

With this, the fate of Ethereum remains uncertain as Bitcoin and XRP are the only large-cap tokens with legal clarity. If Ethereum gets classified as securities in the future, it would be subjected to the same rule as traditional securities like stocks and bonds. Meaning its “registration requirements, disclosure requirements, and other compliance obligations” would have to be in line with securities laws and regulations. It would, therefore, increase its cost and complicate its operations, affecting the value and liquidity in the long run. The current ruling could create uncertainty and affect investors’ confidence in the asset. 

As of press time, ETH had a neutral market sentiment and had surged by 0.2 percent in the last seven days to trade at $1,857.83. 

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