- SEC evaluates whether ETH should be considered a security following Ethereum’s transition to participation testing in 2022.
- Analysts see unlikely approval of Ether-based ETFs by the SEC in May, increasing uncertainty in the market.
The recent 6% decline in the price of Ether (ETH) signals a period of uncertainty for Ethereum, against a backdrop where hopes for ETH exchange-traded fund (ETF) approval are overshadowed by reports of regulatory investigations.
Reports indicate that the Ethereum Foundation is under confidential investigation and that the U.S. Securities and Exchange Commission (SEC) is reviewing whether ETH qualifies as a security, which impacted its price to bring it to approximately $3,200, also affecting the cryptocurrency marketas a whole.
Bloomberg analysts have expressed that they see SEC approval of Ether-based ETFs as unlikely in May, adding yet another challenge to ETH’s incorporation into the U.S. institutional arena. This scrutiny comes on the heels of Ethereum’s transition to a proof-of-participation network in 2022, a situation the SEC appears to be considering for its analysis on ETH’s classification, we discussed at ETHNews.
I'll have some thoughts on this. I do think this relates to the ETF, along with CB/Binance enforcement actions. The SEC has been in an untenable position for some time with its position on ETH. This is imo either (i) an attempt to maintain its ambiguity for just a bit longer or… https://t.co/6vCWOFpkQN
— Scott Johnsson (@SGJohnsson) March 20, 2024
Scott Johnson of Van Buran Capital interprets this situation as an attempt by the SEC to extend its hesitancy regarding ETH or, in a more extreme case, take drastic action. If ETH is classified as a security, it would complicate efforts to launch Ether ETFs in the U.S., with the SEC having until May to decide on approval.
This moment of doubt not only puts future investments in Ethereum at stake, but also opens up a broader debate about the regulation and classification of cryptocurrencies in the U.S., which could have significant implications for the advancement and innovation in the cryptocurrency sector.
