The recent crackdown on crypto mixing platforms like Tornado Cash has raised concerns about the SEC’s potential overreach in its efforts to regulate the crypto market. Furthermore, the SEC’s expected rejection of spot Ethereum ETFs further demonstrates its regulatory stance, as issuers anticipate denial despite efforts from BlackRock and Grayscale.
The U.S. Securities and Exchange Commission (SEC) has been steadily expanding its authority in the crypto regulatory space since its case against Ripple. This securities regulator has filed lawsuits against top crypto firms like Coinbase and Binance, among others. In its most recent crackdown, the SEC is targeting crypto mixing platforms like Tornado Cash, prompting questions about whether the SEC is going too far in its crypto outreach.
It is worth noting that there has been a lack of consistency in legal rulings regarding the classification of tokens as investment contracts. This inconsistency is evident in the Ripple case, where Judge Torres and Judge Failla issued differing rulings, creating uncertainty about the legal status of tokens.
Amidst this uncertainty, Crypto News Flash reported the resignation of two SEC lawyers following a federal judge’s sanctioning and strong criticism of the Wall Street regulator for what was deemed as “gross abuse” of power in a crypto-related case. Michael Welsh and Joseph Watkins, who served as lead attorneys in a case against DEBT Box, stepped down from their positions at the SEC this month. Crypto lawyer Jake Chevinsky commented on their resignation, stating, “I think it will irreparably damage the SEC’s reputation. Many people in the crypto industry have been celebrating this order, and I totally understand that because I think it makes us all feel seen.”
Will the SEC’s overreach extend to Ethereum? Similar to Ripple, the SEC has also been targeting Ethereum (ETH) to bring it under securities laws, as reported by Crypto News Flash. The latest report suggests that the U.S. SEC is likely to reject the approval of spot Ethereum ETFs, with the final decision expected next month on May 23.
Sources familiar with the matter indicate that the U.S. Securities and Exchange Commission (SEC) is likely to reject the eagerly awaited approval of spot Ethereum ETFs. Following recent meetings with the securities regulator, issuers of spot Ether ETFs, along with other firms, anticipate the denial of their applications next month, as reported by Reuters on April 25.
Prominent names such as BlackRock, Grayscale, VanEck, and Ark Invest are among the applicants seeking approval to list ETFs tracking the spot prices of Ethereum (ETH), mirroring the structure of spot Bitcoin ETFs. VanEck and Ark Invest are scheduled to receive the SEC’s decision on May 23 and May 24, respectively, according to the Crypto News Flash report.
Insiders familiar with the discussions revealed that the SEC and its staff have shown little interest in the concept of spot Ether ETFs and their potential. Participants described the conversations as one-sided, indicating a lack of enthusiasm from the regulatory side.
