Key Points
- Consensys Software Inc. has filed a lawsuit against the US SEC over its attempts to classify Ethereum as a security.
- The SEC’s decision on the spot Ethereum ETF is expected between May 23 and 24, with experts predicting a rejection.
The US Securities and Exchange Commission (SEC) is facing a lawsuit for its attempts to label Ethereum (ETH) as a security and its anticipated rejection of the spot Ether ETF. The official decision on the spot Ethereum ETF is expected to be made between May 23 and 24. Experts predict that the SEC will likely reject the proposal.
The SEC’s argument is expected to be based on the limited data available for the Ether futures ETF, compared to its Bitcoin counterpart. Meanwhile, the SEC has already started investigating Ethereum-based DeFi projects, including Uniswap (UNI). Despite this, the Ethereum community maintains that Ethereum is a commodity, not a security, and that the spot Ether ETF should be approved without hesitation.
Consensys Stands Up for Ethereum
Consensys Software Inc., a leading blockchain and software company, filed a lawsuit against the SEC on April 25 in the US District Court for the Northern District of Texas. The lawsuit is aimed at protecting the future of the web3 space and ensuring the Ethereum network remains a key player in the blockchain industry.
Consensys argues that Ethereum is a global computing platform, not an investment scheme, and should not be classified as a security. Instead, it should be considered a commodity, a view supported by the Commodity Futures and Trading Commission (CFTC).
Web3 Platforms and SEC Jurisdiction
Consensys also highlighted that web3 platforms, such as Uniswap, which allow people to transact using Ethereum, are not securities brokers. Therefore, the SEC should not have jurisdiction over the Web3 platform. They argue that the SEC’s unlawful power grab threatens to undermine America’s position as a leader of the next generation of the internet.
According to Consensys, 29% of the 190k direct employees in the cryptocurrency industry are based in the United States. The SEC declared Etfee as not a security in 2018, as observed through Hinman’s statements. Consensys has urged the jury to weigh on its facts.
Ethereum’s Market Position
The Ethereum network remains the leader in the web3 ecosystem, with a stablecoins market cap of about $83 billion and a total value locked of around $54 billion. The Ethereum network, with the emergence of new smart contract-based blockchains, has facilitated more than $268 billion in bridged TVL over the past few years.
As of now, the price of Ethereum is around $3,142, down approximately 10 percent in the last two weeks. Ethereum bulls are hoping to retest the ATH, which will be triggered by a reversal in Bitcoin dominance.
