- SEC Commissioner Caroline Crenshaw criticized the agency’s contradictory stance on crypto assets like ETH and SOL, warning that the so-called push for regulatory clarity is instead creating confusion.
- She argued that labeling the same assets as both securities and non-securities undermines investor protection and the SEC’s legal credibility.
SEC Commissioner Caroline A. Crenshaw has ignited controversy within the regulatory body by calling out what she describes as the agency’s “deeply inconsistent” treatment of crypto assets like Ethereum (ETH) and Solana (SOL). In a blistering statement titled “Muddying The Waters: More Confusion On Crypto Asset Security Status,” Crenshaw warned that the SEC’s current path is eroding both investor trust and legal coherence.
Her criticism targets recent approvals of crypto-focused exchange-traded funds (ETFs), such as the Rex-Osprey ETH + Staking ETF and SOL + Staking ETF. These funds were greenlit under the Investment Company Act of 1940, implying ETH and SOL are securities. Yet, other SEC-sanctioned exchange-traded products (ETPs) treat the same assets as non-securities. The contradiction, Crenshaw argued, creates a regulatory paradox.
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“These assets cannot be both securities and not securities at the exact same time,” she wrote. “Rather than clarity, it seems we are simply getting out of the way of anything and everything in the crypto space.”
Crenshaw’s remarks come just as the SEC’s newly formed Crypto Task Force was being hailed by some—like Commissioner Hester Peirce and Chairman Paul Atkins—as a step toward regulatory clarity. But Crenshaw says the initiative has only deepened confusion. She also revealed that SEC staff raised concerns about the ETFs’ legal footing and investor disclosures—concerns that were allegedly ignored as the products went live.
This internal discord highlights the agency’s struggle to apply consistent legal definitions to crypto assets. According to Crenshaw, the current dual classification—securities in some cases, not in others—violates longstanding principles under both the Securities Act of 1933 and the Investment Company Act of 1940.
Unless the SEC resolves these contradictions, Crenshaw warns, its credibility and investor protection mission may suffer long-term damage.
As the crypto industry watches closely, the future of ETH and SOL’s legal status—and the integrity of crypto regulation in the U.S.—hangs in the balance.