Ethereum: Can it beat SEC’s ‘security’ label? JP Morgan says…

For the last couple of weeks, the Securities and Exchange Commission has been actively pursuing an investigation intoThis investigation primarily revolves around Ethereum’s shift to proof-of-stake governance in September 2022. Additionally, a recent report byhighlighted the concentration risks associated with ETH staking, particularly with platforms like Lido.

This was in light of how the staking platform Lido is experiencing a decrease in its share of staked Ether. Remarking on the same, Nikolaos Panigirtzoglou, an exec at“The share of Lido in staked ETH has decreased further from around one third a year ago to around a quarter at the moment.”“This should reduce concerns about concentration in the ethereum network, thus raising the chance that ethereum will avoid being designated as security in the future.

According to their findings, if tokens on a network demonstrate sufficient decentralization, the SEC is less likely to classify them as securities.“The Hinman documents are likely to influence the direction of the current U.S. congressional effort to regulate the crypto industry in a way that ether would avoid being designated as a security.”

This outcome would follow the pattern set by Ripple’s XRP, which faced similar classification challenges.The ongoing challenges have directly affected ETH’s price performance in the second quarter of 2024 with the cryptocurrency experiencing fluctuations throughout this period.

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