The U.S. Securities and Exchange Commission’s (SEC) quest to establish Ether as a security might not have been as resolute as it initially appeared. The SEC concluded its probe into the matter on June 19. Laura Brookover, a lawyer for Consensys, declared that there would be “no further claims by the SEC regarding Ether’s classification as a security.” This stance followed the SEC’s recent approval of ETH-based exchange-traded funds (ETFs), a move that, according to Brookover, was a response to the pressure to “rescind the subpoenas against Consensys,” following the approval of a rule change that deemed ETH a commodity.
In a letter from Consensys, the SEC’s endorsement of spot Ether ETFs was interpreted as a shift in the agency’s stance, suggesting that Ether should be categorized as a commodity rather than as a security. Yet, the SEC has not publicly validated this interpretation. When approached by Cointelegraph, an SEC spokesperson remained tight-lipped, stating that the Commission “does not comment on the existence or nonexistence of a potential investigation.” Carol Goforth, a professor at the University of Arkansas School of Law who specializes in business associations and securities regulation, argues that the SEC’s approval of a spot Ether ETF does not necessarily equate ETH to a commodity, noting that there are already ETFs with commodities as their underlying assets.
Iran embarks on CBDC pilot
The Central Bank of Iran (CBI) has initiated a public trial for a national digital currency (CBDC), aimed at facilitating domestic micropayments. The pilot, which commenced on June 21, the first day of the month of Tir, will introduce the Iranian digital currency to banking clients and tourists on the island of Kish. Kish, an island spanning 92 square kilometers and the second largest in the Persian Gulf, is situated south of Iran. Renowned as a tourist hotspot, Kish draws approximately 12 million visitors annually. Given its status as a free trade zone, tourists visiting Kish are often exempt from visa requirements. During the trial, bank customers and tourists can employ the digital rial to make purchases by scanning a barcode using specialized software, adding a new payment channel alongside cash and bank cards.
Uphold discontinues support for stablecoins in Europe
Cryptocurrency exchange Uphold has alerted its European users to the discontinuation of support for six prominent stablecoins effective July 1. Uphold’s decision is in line with the European Union’s Markets in Crypto-Assets Regulation (MiCA). The affected stablecoins include Tether (USDT), Frax Protocol (FRAX), Gemini dollar (GUSD), Pax dollar (USDP), and TrueUSD (TUSD). Users holding these stablecoins must transfer them to another cryptocurrency by June 28, after which Uphold will automatically convert them into USD Coin (USDC). MiCA, set to take effect on June 30, imposes enhanced and stricter regulatory demands on fiat-backed stablecoins and e-money tokens that have reached a specific level of adoption, determined by a set of seven quantitative and qualitative criteria. The rule mandates that fiat-backed stablecoins be backed by a 1:1 ratio of liquid reserves, with issuers required to maintain a reserve of assets held in trust by a third party separate from other assets. It also bans algorithmic stablecoins outright.
Italy intensifies surveillance of the crypto market
Italy is poised to enhance its oversight of the crypto market as part of its adherence to the MiCA regulatory framework. The new regulations will boost supervision of digital asset markets to遏制和 punish insider trading and market manipulation schemes. The decree outlines fines ranging from 5,000 to 5 million euros ($5,400–$5.4 million) based on the severity and extent of regulatory breaches. MiCA’s regulatory framework is compelling blockchain companies to make challenging decisions, as decentralized finance (DeFi) protocols face the tough choice of fully decentralizing their networks or complying with the framework’s Anti-Money Laundering and Know Your Customer regulations.