The reported subpoenas issued by the United States Securities and Exchange Commission (SEC) to companies associated with the Ethereum Foundation have raised concerns of a coordinated attack on Ether (ETH) and could impact the approval of spot Ether exchange-traded funds (ETFs).
Coinbase’s chief legal officer, Paul Grewal, emphasized that SEC Chair Gary Gensler previously affirmed Ether’s non-security status, highlighting the lack of justification for denying ETH ETF applications.
Industry observers, including Travis Kling of Ikigai Asset Management, perceive the subpoenas as part of a coordinated attack on Ethereum. This sentiment is echoed by Fox Business reporter Eleanor Terrett, suggesting a possible link to the SEC’s reluctance to engage with ETH ETF issuers.
The SEC’s actions have led Bloomberg ETF analysts to reduce the likelihood of approved spot Ether ETFs from 70% to 25% by May. The delay and lack of engagement from the regulator raise concerns about the ETF approval timeline.
Patrick McHenry, chair of the House Financial Services Committee, and others express disapproval of the reported probe, arguing it contradicts the SEC’s previous stance on Ether’s regulatory status.
Charles Hoskinson, founder of Cardano, suggests the SEC may reconsider Ether’s security status following Ethereum’s transition to a proof-of-stake consensus mechanism. However, former CFTC commissioner Brian Quintenz refutes this, emphasizing the SEC’s acknowledgment of Ether’s non-security status.
While the SEC continues to delay its decision on spot Ether ETFs, applicants like BlackRock, VanEck, and others await approval. Balchunas and Seyffart predict a denial of spot Ether ETFs in the short term but anticipate approval by 2025.
The SEC’s probe into the Ethereum Foundation and its implications for ETH’s regulatory status raise concerns about the approval of spot Ether ETFs. The regulatory landscape surrounding Ether remains uncertain, impacting market sentiment and investor expectations.
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