Legal Complexities and Market Effects
Ether’s legal classification is a central point in the discussion, especially after Ethereum moved to a proof-of-stake mechanism. This means that you can make the tokens ‘work’ for you on the network. Currently, around 25% of tokens are ‘active’ in the form of staking.
Such a classification as ‘security’ would have significant implications for the way Ether is treated within financial regulations in the United States and possibly abroad.
This situation has been further highlighted by a recent lawsuit filed by the New York Attorney General against the exchange KuCoin, where Ether was listed as an unregistered security.
Increase in SEC regulations
In parallel, the Securities and Exchange Commission (SEC) is stepping up its enforcement efforts within the crypto sector. There is a trend towards more aggressive regulation and enforcement, with platforms and companies such as Coinbase and Ripple coming under fire. These moves indicate a period of heightened legal uncertainty and regulatory attention in the US.
Due to the uncertainty and increased regulatory attention, Ether’s market price has recently fallen significantly. This volatility underlines the sensitivity of the crypto market to legal and regulatory developments, especially those from the United States, where much of the crypto infrastructure and trading is located.
Ethereum in ETF’s
The SEC has also delayed approval of Ethereum ETFs and is seeking public feedback regarding Ethereum’s new proof-of-stake structure. The question is whether and how these types of funds can ever go ahead. Bitcoin funds have had to lobby for years to make it happen.
Source: https://bitcoinmagazine.nl/nieuws/ethereum-foundation-sec-onderzoek
