Impact of changing SEC policy on ETH ‘yet to be seen’ – Consensys SC

The political environment could affect how the United States Securities and Exchange Commission (SEC) handles policies related to leadership in the 2024 election, a senior adviser to Consensus said.

Speaking to Cointelegraph at the Consensus conference in Austin on May 29, Bill Hughes, Consensus senior counsel and director of global regulatory affairs, said it remains unclear whether the changing political and regulatory landscape in the US could affect the company's lawsuit against Ether at the SEC. ETH) In the past 30 days, lawmakers have passed advanced legislation calling for regulatory transparency at the SEC. The Commission approved the site for the Ether exchange for the first time, and digital assets are part of the actions of both major party presidential candidates before the election.

“What effect does this have on investigations? [the SEC has] Open, their concept of what is or isn't a security offering in their view has yet to be seen,” Hughes said, referring to the approval of the Spot Ether ETF. “We think it's basically a positive development and one that shouldn't have been controversial at all.”

In April, Consensys filed a lawsuit against the SEC and its five commissioners in Texas for planning to “regulate ETH as a security.” The company said it has received a Welsh notice from the commission warning of enforcement actions related to its MetaMask Swaps and MetaMask Staking products.

However, the lawsuit comes before the SEC approves 19b-4 filings for several asset managers seeking to list and trade on US exchanges, indicating that the commission recognizes ETH as a commodity. The settlement documents include statements from SEC Chairman Gary Gensler and the head of the commission's enforcement division, Gurbir Grewal, who approved a formal investigation into Ether as a security.

“The political environment is changing, and the full impact that will have on the commission's decisions and staffing is yet to be seen,” Hughes said. “That's really the question that the chair and his two Democratic colleagues might be thinking didn't exist two weeks ago.

Consensys counsel provided its views on the SEC actions:

“I don't expect a wave of proposed legislation as the industry has suggested for years. [Approving spot Ether ETFs] The only thing they're doing is supposedly less contrarian than what they've been doing for crypto.

RELATED: SEC To Close Regional Office After Judge Dismisses Debt Fund Case

Lawmakers in the U.S. Senate may consider the Financial Innovation and Technology for the 21st Century Act, or FIT21, within a year of passing the House of Representatives. The bill would clarify the SEC's role in digital assets, providing a way for the Commodity Futures Trading Commission to regulate many tokens as commodities.

“We've always believed that politics — maybe outside the SEC, but inside the SEC — was driving the decision to make some policy choices,” Hughes said. But there are external pressures for certain policy approaches that influence SEC decision makers […] It is not yet seen how it will be filtered in different parts.

On June 5, Chairman Gensler suggested that the SEC would “take some time” to greenlight S-1 filings from asset managers applying for space ether ETFs — the final step before the exchange can list and sell the investment vehicles. ETF analyst Eric Balchunas predicted a July 4 launch date for the spot ether ETF in the United States.

Magazine: Godzilla vs. Kong: The SEC faces a tough battle with crypto legal firepower