Regulators have decided to step back from Ether (at least for now), a move that many experts believe could provide the asset with the opportunity to thrive. On June 19, 2024, the United States Securities and Exchange Commission (SEC) officially concluded its inquiry into whether Ether (ETH) should be considered a security. Laura Brookover, a lawyer from Consensys, stated that the crypto markets will no longer face objections from the SEC regarding ETH’s security status.
However, Carol Goforth, a professor at the University of Arkansas School of Law specializing in business associations and securities regulation, cautioned that the SEC’s decision simply means that they are pausing their investigation for now, and it is not a definitive ruling. Consensys views the SEC’s decision to withdraw from its Ethereum investigation as a significant relief for the network’s sustainability.
The SEC’s retreat from scrutinizing Ethereum has quelled concerns around ETH being classified as a security. This development raises questions about how ETH’s price will respond now that there is more clarity. Additionally, the investigation had implications for other cryptocurrencies similar to Ether, prompting speculation about which altcoins could benefit from Ethereum’s newfound freedom.
Market analysts predict a surge in Ether’s price following the SEC’s decision to halt its investigation. Since the SEC’s inquiry ended, Ether’s price has remained relatively stable, maintaining a horizontal pattern that started after the news of spot Ether ETF approval in May. At present, Ether has seen a 2% decrease, leading some traders to speculate on whether ETH will experience a surge and if other altcoins will follow suit.
Conor O’Neill, a community lead and partner at investment analytics company Blockcircle, believes that Ethereum’s major regulatory hurdle has been removed, setting a precedent for regulators globally. O’Neill anticipates a significant price increase for Ethereum, especially with the anticipated launch of spot Ether exchange-traded funds on July 2.
While the approval of ETH ETFs is positive news for the crypto market, certain conditions set by the SEC, such as restrictions on staking in ETFs, could impact ETH’s long-term performance. Concerns have also been raised about potential Grayscale outflows affecting Ether’s price post-ETF launch, similar to what happened with Bitcoin.
The SEC’s decision to halt its investigation into Ethereum may have implications for other altcoins that the agency has accused of being securities. Projects like Aave, Chainlink, and layer-2 chains such as Arbitrum and Optimism could benefit from the SEC’s retreat, but they still face regulatory scrutiny.
As the regulatory landscape evolves, especially with the upcoming U.S. presidential election and potential changes in SEC leadership, the future of altcoins and ETFs remains uncertain. The recent developments surrounding Ethereum and the SEC signal a potential shift in approach towards cryptocurrencies, marking a pivotal moment for the market as a whole.