The potential classification of staked Ether as a security by the United States Securities and Exchange Commission (SEC) has raised concerns for Alex Thorn, the head of research at Galaxy Research. These concerns arise amidst growing expectations that the SEC may soon approve spot Ether exchange-traded funds (ETFs).
Thorn speculates that the decision to approve a spot Ether (ETH) ETF could align with previous court cases. In response to Thorn’s speculation, a member of the community expressed concern about the liquidity challenges of staking Ether within an ETF, which could make it difficult to comply with regulatory requirements.
Thorn, while uncertain, addresses this concern by noting that there are typically limits on lending ETF collateral, which could serve as a comparable point of reference. However, he also points out that European exchange-traded products (ETPs) offer staking services.
Historically, the SEC has sought to classify Ether as a security, and this pattern continues, as highlighted in a recent report by Fox Business producer Eleanor Terret. Terret references court documents filed by Consensys on April 29, which suggest that the SEC and SEC Chair Gary Gensler have believed for at least a year that Ether is an unregistered security.
On May 20, Bloomberg senior analyst Eric Balchunas stated that the odds of approval for an Ethereum ETF have increased from 25% to 75%. This shift in stance occurred after Balchunas heard rumors that the SEC could be changing its position on the matter due to it becoming an increasingly political issue.
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