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Ethereum Gains 3% in Wake of SEC Dropping Its ETH Investigation Without Charges

Author

Gerry Rafferty
June 19, 2024

Ethereum Gains 3% in Wake of SEC Dropping Its ETH Investigation Without Charges

Ethereum (ETH) has seen a 3% increase in value after the Securities and Exchange Commission (SEC) announced that it is closing its investigation into the cryptocurrency without filing charges. The investigation was related to Ethereum's claims that the SEC was trying to regulate ETH as a security, despite the fact that it does not meet the definition of a security. The SEC had been investigating Ethereum since March and had sued the company in April, arguing that the agency was overstepping its authority.

The SEC's decision to drop the investigation has been welcomed by the cryptocurrency community, with many coins closely tied to Ethereum seeing double-digit gains in the past day. However, not everyone is celebrating, with Coinbase Chief Legal Officer Paul Grewal criticizing the SEC's Howey Test, which has been used to determine whether an asset meets the definition of a security.

The Howey Test has been criticized for being outdated and unfit to apply to cryptocurrencies, with some arguing that it is being used to unfairly target certain assets. SEC Chair Gary Gensler has also stated that proof-of-stake assets could be considered securities under the Howey Test, which has raised concerns about the potential for further regulatory action against certain cryptocurrencies.

Despite the SEC's decision to drop its investigation into Ethereum, it is clear that regulatory scrutiny is still a major concern for the cryptocurrency industry. Many coins have been named in lawsuits filed by the SEC, and there is still much uncertainty about how the agency will approach regulation in the future.

Bitcoin ‘Banana Zone’ is next if these 3 indicators play out

Bitcoin is on the cusp of entering a euphoric "Banana Zone" phase, characterized by significant price surges. However, analysts believe that three key indicators need to reverse before this can happen. According to CryptoQuant's IT Tech, these indicators include a reduction in miner selling, increased stablecoin inflows, and a decrease in outflows from spot Bitcoin exchange-traded funds (ETFs).

Miner selling has been increasing since mining revenue dropped by 55% since Bitcoin's all-time high in March. Additionally, stablecoin liquidity has decreased due to the absence of new issuances, affecting price volatility. Furthermore, outflows from spot Bitcoin ETFs are creating selling pressure for Bitcoin.

IT Tech believes that if these indicators do not reverse, it could mean that Bitcoin is not ready for a sustainable recovery. The analyst notes that the current market is characterized by sideways chop, but traders anticipate a directional shift in the near term. Rekt Capital, a pseudonymous crypto trader, believes that breaking the downtrend line will initiate a price reversal.

Bitcoin's current price is $64,966, down 2.35% over the past 30 days and 12% from its all-time high in March. Major altcoins like Solana, Dogecoin, and Shiba Inu have also experienced significant declines over the past week. The article concludes by highlighting the importance of these key indicators and the potential for a "massive" rally if they do reverse.

SEC’s Head Of Crypto Assets Enforcement Division Quits Agency

David Hirsch, the head of the Securities and Exchange Commission's Crypto Asset and Cyber Unit, has announced his retirement after almost a decade of leading the agency's digital asset enforcement team. Hirsch will be stepping down from his role after nine years with the SEC, citing his pride in the historic work done by his team. He has not shared details about his future plans, stating that he will take a personal break before making any announcements.

Hirsch's departure has sparked speculation about a potential change in the SEC's approach to cryptocurrency regulation. During his tenure, the agency undertook at least 45 cases related to crypto assets, and Hirsch was known for his focus on enforcement action. However, it remains to be seen whether his departure will lead to a shift in the SEC's approach to regulating the sector.

Pump.fun, a popular memecoin launchpad, claimed that Hirsch had joined the project after months of conversations, stating that he had launched over 100 memecoins. However, Hirsch denied these claims, calling them false and stating that he had not joined any project.

The SEC has had a rocky relationship with cryptocurrency companies, with both sides engaging in several legal battles and failing to cooperate on creating a regulatory framework for the sector. The agency's approach has been criticized for being overly aggressive and lacking clarity. With Hirsch's departure, it remains to be seen what changes may be implemented to address these issues.

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