ETH joins BTC in becoming a safe crypto investment option for US institutional investors
I don’t know if it’s the writing on the wall that ETH prices are soon set to boom when ETH ETF products are launched in the US, and they begin trading.
Oh, yes we all know that’s happening at least as the SEC has approved 19b-4 forms from eight asset managers — VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shres, Invesco Galaxy and Bitwise on May 23.
Now, once S-1 forms filed by these asset managers are also approved by SEC, then it’s BINGO!, these asset managers can launch their ETH ETF products.
SEC’s green signal for the launch of ETH ETFs sets a strong bull foundation for the asset!
Yes, I know, it’s a bit of a déjà vu’ as we had BTC ETF launches this January which actually validated the thesis that was earlier circulating around for long that this would trigger BTC’s bull run.
So, when ETH ETFs launch, the normal expectation is there that this will trigger an ETH bull run as institutional investors,ie; the crypto whales buy these products. There is a possibility of increased fund inflows into these ETH ETF products brought about by whale demands.
Be that as it may, there is no denying that SEC’s move of approving ETH ETFs is bullish for the ETH asset, as from that time the writing in the wall emerged that SEC would not declare ETH as a security.
Established norm that ETF products approved by SEC custody only commodity assets
ETF products issue shares of commodity assets they custody. So, if ETH was confirmed to be a security it would not be permitted to be registered as a ETF using form S-1 form for sure.
However, SEC is permitting the above-mentioned asset managers to register their ETH ETF products through S-1.
So, from May 23rd only, the writing was clear on the wall that SEC would not declare ETH as a security.
All these asset managers took care to make no mention of Ethereum staking as a product in their form 19b-4 to avoid the risk of their applications getting rejected!
Confirmation on SEC’s new stance on ETH since it approved launches of ETH ETFs
Now, there’s confirmation that SEC has ceased having the evil aim of finding reasons to declare Ethereum a security. The enforcement agency has implicitly shown that it’s finally concluded Ethereum to be a commodity!
Consensys had gladly revealed to public, SEC’s changed stance on Ethereum when the Enterprise that’s made Ethereum tools like Metamask wallet got notified by SEC that the enforcement agency is no longer pursuing its investigations to frame Ethereum 2.0 as security.
So, SEC would not create problems for investors buying, selling and holding ETH, as those transactions will not be framed as security transactions by SEC.
Still, same can’t be said about staked ETH, which is why Consensys is still pursuing court route to secure court order stating that staking and swap services of Metamask is not violative of security laws.
SEC armed itself to punish businesses that dealt with facilitating use of ETH
SEC had instigated Consensys to file a law-suit against SEC this April when SEC sent a Wells notice to Consensys.
This Wells notice disclosed the intend of SEC to take enforcement action on Consensys for its involvement in activities dealing with enabling adoption of ETH asset which SEC at that time wanted to declare as a security.
Consensys, deals in developing Ethereum tools and infrastructure so Enterprises can build dapps that find adoption with the dapps being built to be user-friendly.
SEC had mentioned that Consensys’ built Metamask is violative of securities laws because it allows for staking and swapping of ETH, which SEC at that point in time was planning to declare as security.
SEC’s chair Gary Gensler, was finding opportunities to declare ETH as a security ever since Ethereum transitioned into a Proof of Stake protocol.
Last year on March, the SEC had started its investigations into Ethereum 2.0 on whether the ETH asset issued by the POS Blockchain is a security.
Well, that’s stopped now!
Gary’s SEC is very unpopular for his enforcement actions now extending to decentralised protocols
It’s unlikely that SEC suddenly changed its stance on ETH based on the fundamental insights it might have derived studying Ethereum 2.0 Blockchain.
Surely, Gary was not bothered about the negative implications that can come about on the Blockchain industry, innovation and economy of the USA if ETH was declared a security.
It looks likely that SEC changed it’s stance on ETH out of political pressure because US voters provably want more crypto friendly legislations and US elections are nearing.
Whatever it is, we crypto community agree on SEC under Gary actually to have been insane to even consider declaring ETH as security. SEC began attacking established businesses like Uniswap Dex and Consensys for Metamask wallet.
Obviously, this sounds absurd that entitities who have specialised in building of established decentralised protocols and Blockchain components like Web3 wallets should be accused of violating securities laws. Here, SEC has crossed a line!
SEC is not right to obstruct people from having control over their finances using Web3 protocols
What hits me is that this affects US Citizens — as these challenge their rights in using decentralized applications, and holding crypto. We all have the right to own and have control our wealth and data.
We should be free to use our money on decentralised applications including DEFI where we can lend and borrow money, trade and do financial transactions retaining custody of our assets.
It’s fair for us to have agency over our money and wealth without relying on third party entities like banks or stock market brokers etc.
However, here is where the problem arises for Government authorities and banks as they want to keep having absolute control over our money, wealth and keep having an eye on our financial transactions.
US Economic growth is stalled with Blockchain businesses discouraged from operating here…
Lastly, Governments and Government Financial authorithies have to acknowledge that Blockchain industry should be allowed to grow. Developers should be allowed to develop dapps with innovative use cases. This will obviously create jobs and give a boost to the economy.
It’s high time suitable regulatory framework is put in place to ensure Blockchain entities are hindered from indulging in malpractices to protect the interests of crypto users, investors etc.
Obviously, laws should be made encouraging best practices in the Blockchain industry. This kind of positive regulation is always welcome.
But SEC under Gary is not learning its lessons, and due to this US is prevented from being a market leader in creating awesome Web3 products. Those products would be created with businesses establishing base in other crypto-friendly locations.
Atleast that was the writing in the wall for a while ever since SEC under Gary began attacking Blockchain industry players, except ofcourse friend companies like FTX whose CEO Sam had political connections with Gary, we all know that!
Thanks for reading!
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