Alex Thorn, the head of research at Galaxy Research, has expressed concerns about the United States Securities and Exchange Commission (SEC) potentially categorizing staked Ether as a security. Thorn’s speculations come amidst growing expectations that the SEC may soon give approval to spot Ether exchange-traded funds (ETFs).
Thorn has suggested that the decision to approve a spot Ether (ETH) ETF could align with previous court cases. In response to Thorn’s comments, a member of the community has raised concerns about the liquidity challenges that staking Ether within an ETF could pose, making it difficult to comply with regulatory requirements.
Thorn, while uncertain, addressed this concern by pointing out that lending ETF collateral typically has limitations, which could serve as a comparable point of reference. However, he also noted that European exchange-traded products (ETPs) offer staking services.
The SEC has historically sought to classify Ether as a security, and this pattern continues, as highlighted in a recent report by Fox Business producer Eleanor Terret. Terret, citing court documents filed by Consensys on April 29, suggested that the SEC and SEC Chair Gary Gensler have believed for at least a year that Ether was an unregistered security.
According to Bloomberg senior analyst Eric Balchunas, the odds of approval for an Ethereum ETF have increased from 25% to 75%. This significant change in stance occurred after Balchunas heard rumors that the SEC could be reversing its position on the matter, considering it an increasingly political issue.
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