(Kitco News) - Fidelity Investments has signaled that its institutional clients will be able to access Ether (ETH) custody and trading services beginning later this month, according to an email sent to customers.
Access to Ether services will be managed through the firm's crypto wing, Fidelity Digital Assets, which will give institutional investors the ability to purchase and hold the second-ranked crypto starting October 28.
According to the note from Fidelity, investors will be able to buy, sell and transfer Ether “using the same model provided for bitcoin investments today.”
The note opened by highlighting the successful completion of the Ethereum Merge, suggesting that it has resulted in an increase in interest from investors who are “looking at Ethereum through a new lens,” likely referring to the network’s reduction in energy consumption following the switch to proof-of-stake.
This announcement from the asset manager follows its Sept. 26 filing with the SEC detailing the firm’s launch of a new Ethereum Index Fund that provides its clients with exposure to Ether. The new fund has already raised more than $5 million in deposits since its launch.
The move suggests that Fidelity is anticipating that Ether will ultimately be considered a commodity by regulators in the U.S. when it's all said and done. Back in 2018, William Hinman, the SEC’s then-director of corporate finance, publicly stated that at that time the regulating body had no plans to classify either Bitcoin or Ether as securities.
“Offers and sales of ether are not securities transactions,” Hinman said in his speech.
Subsequent comments from current SEC Chair Gary Gensler muddied the waters when the regulator suggested that the fixed-income-like returns of staking Ether are consistent with securities classifications. Following the comments from Gensler, the price of Ether fell by 11%.
Currently, the Digital Commodities Consumer Protection Act (DCCPA), which seeks to classify BTC and ETH as commodities and put them under the purview of the Commodity Futures Trading Commission (CFTC), is making its rounds through the legislature.
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| Fidelity sees the rising promise of Bitcoin as portfolio insurance |
Fidelity’s impending launch of Ether custody and trading services indicates that they feel the bill will ultimately pass and officially define Ether as a commodity. Fidelity Digital Assets has supported Bitcoin trading since its launch in 2018.
The topic of classifying cryptos as securities or commodities has been an intense area of debate for years now and is the underlying basis of the ongoing lawsuit between the Securities and Exchange Commission (SEC) and Ripple Labs.
The SEC has charged the XRP token issuer with conducting an unregistered security offering in a case that has been ongoing for two years. The litigation is expected to come to an end in the coming months as both parties have requested that the judge on the case issue a summary judgment. How that case ultimately settles could play a factor in how Ether is treated in the future.
