Exploring 3 Theories on Why the SEC is Focusing on Ethereum: Insights from a Cryptocurrency Attorney”
The regulatory body aims to uphold its legal stance in the ongoing litigation against Coinbase and Binance (Ethereum) without diminishing its credibility.
Speculation Surrounding SEC’s Ether Probe: Insights from a Crypto Lawyer
Amidst reports of the Securities and Exchange Commission (SEC) investigating Ethereum and its foundation, a crypto lawyer suggests that this move might serve various strategic purposes for the regulatory body.
Scott Johnsson, a finance lawyer and general partner at Van Buren Capital, weighs in on the situation. One theory posits that the SEC’s probe into Ethereum could be a strategic maneuver to appease critics within the crypto space, particularly those advocating for a tougher regulatory stance. Democratic senators Jack Reed and Laphonza Butler recently urged SEC chair Gary Gensler to halt further approvals of spot crypto exchange-traded funds (ETFs), echoing concerns raised by Senator Elizabeth Warren.
Another theory gaining traction suggests that the SEC’s investigation might be aimed at obstructing the approval of spot Ethereum ETFs. Johnsson explains that the SEC could utilize a non-correlation objection as a basis for denial, although he notes that this objection might not hold up over time due to improving correlation levels.
Also, read- BlackRock Joins Asset Tokenization Competition with New Fund on Ethereum Blockchain
Moreover, Johnsson suggests that the probe could serve the SEC’s interests in ongoing legal battles against major crypto exchanges like Coinbase and Binance. He believes that by maintaining ambiguity regarding Ethereum‘s security status, the SEC can navigate these legal challenges without undermining its position.
In response to these speculations, Coinbase’s chief legal officer, Paul Grewal, expressed skepticism, arguing that Ethereum’s regulatory status has been well-established and endorsed by the SEC in the past. US Congressman Patrick McHenry also criticized the SEC’s actions, highlighting inconsistencies between the SEC’s stance and that of the Commodity Futures Trading Commission (CFTC).
Overall, the reported SEC probe into Ethereum raises questions about its potential implications for the crypto market and regulatory landscape.
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