Consensys’ senior counsel suggests that the United States Securities and Exchange Commission (SEC) could be influenced by the political landscape leading up to the 2024 election when it comes to crypto-related policies. Bill Hughes, Consensys’ senior counsel and director of global regulatory matters, expressed uncertainty at the Consensus conference in Austin on May 29 about how changes in politics and regulations in the U.S. might impact the firm’s ongoing lawsuit against the SEC regarding Ether (ETH). Recent legislative advancements have called for regulatory clarity at the SEC, which has also approved spot Ether exchange-traded funds for the first time. Digital assets have been a significant part of the actions taken by both major party presidential candidates in anticipation of the upcoming election.
Hughes emphasized that the approval of spot Ether ETFs could potentially influence the SEC’s ongoing investigations and their stance on what constitutes a securities offering. Despite this, he viewed the approval of Ether ETFs as a positive development that should not have been a subject of controversy.
In April, Consensys filed a lawsuit against the SEC and its five commissioners in Texas, alleging that they intended to classify ETH as a security. The company received a Wells notice from the commission, indicating possible enforcement actions related to its MetaMask Swaps and MetaMask Staking products.
The lawsuit was filed before the SEC gave the green light to 19b-4 filings for several asset managers seeking to list and trade spot Ether ETFs on U.S. exchanges, suggesting that the commission may view ETH as a commodity. Despite this, SEC Chair Gary Gensler and the commission’s enforcement division head Gurbir Grewal approved a formal investigation into Ether as a security.
As the political landscape continues to evolve, Hughes speculated on how this might impact the SEC’s decisions and the work of its staff. He mentioned the potential impact of external pressures on the SEC’s policy choices and decision-makers.
Chair Gensler hinted on June 5 that the SEC would take some time to approve the S-1 registration statements from asset managers applying for spot Ether ETFs, which is the final step before exchanges can list and trade these investment vehicles. ETF analyst Eric Balchunas predicted a potential launch date of July 4 for spot Ether ETFs in the United States.
Overall, the SEC faces a challenging battle against crypto’s legal firepower, as the regulatory landscape continues to evolve.