Consensys Sues SEC over Ether Regulation; BlackRock Denies Hedera Involvement
Summary:
Consensys, the developer of MetaMask, has filed a lawsuit against the United States Securities and Exchange Commission (SEC), alleging plans to regulate Ether as a security. Despite the successful launch of spot Bitcoin ETFs, Ether ETF approval seems unlikely next month. Separately, BlackRock has denied any involvement in the tokenization of its $22 billion money market fund on Hedera, which led to a slight decrease in the token's value.
The United States Securities and Exchange Commission (SEC) finds itself on the receiving end of a lawsuit filed by Consensys, the developer behind MetaMask. This is occurring amidst pessimistic forecasts that Ether ETFs' approval won't come about in the next month, regardless of the Bitcoin ETFs' achievement. BlackRock, the asset management giant, however, ratified that it had no active involvement in the tokenization of its $22 billion money market fund on Hedera, causing a slight decrease in the token's value.
The lawsuit launched by the software development corporation, Consensys, targets the U.S. SEC and its five commissioners. The grounds for the litigation are their intentions to regulate Ether (ETH) as a security. Consensys argues in a filing at the Northern District of Texas that the securities watchdog is colluding "to capture control over the cryptocurrencies' future" by making moves to regulate ETH as a security. The firm draws on the SEC's past inferences from 2018 when it stated that Ether is not a security in its argument. The filing continued to express that the SEC's unauthorised oversight of ETH could be disastrous for the Ethereum network and Consensys. It would leave all the ETH holders, including Consensys, in peril of breaking securities laws if they transferred ETH on the network. The lawsuit also points out the irregular comments by Chairman Gensler regarding Ether. Gensler refrained from commenting about ETH's regulation by the SEC in an April 2023 hearing before the House Financial Services Committee.
A report suggests that the U.S. SEC will most likely not approve spot Ether (ETH) exchange-traded funds (ETF) applications in May. The report mentioned on April 24th, that U.S. issuers and other companies predict the SEC will refuse to green-light ETH ETFs next month, following several meetings with the regulator in recent weeks. Four people who attended these meetings claimed that discussions about ETH ETFs were less fruitful compared to an earlier detailed discourse between issuers and the agency that took place in January, weeks before BTC ETFs got the approval.
Several analysts concur that the SEC is probably going to postpone approving Ether ETFs further. In fact, one expert estimated the probability of a spot Ether ETF getting approved in May at around 35% earlier in March. This uncertainty also extends to BlackRock's involvement – or lack thereof - with Hedera. The firm clarified that it has "no business ties" with Hedera and it did not opt for the Hedera Hashgraph for tokenizing any BlackRock funds. This includes shares of its $22 billion money market fund. After a misunderstanding that BlackRock was actively participating in the tokenization initiative, a spokesperson for BlackRock confirmed to Cointelegraph that this was not the case. They emphasized that BlackRock has no financial connection with Hedera, nor has it chosen Hedera to tokenize any BlackRock funds. It was also pointed out that as they have done routinely, BlackRock would announce to the public any changes in its digital asset strategy.
At the time of reporting, HBAR has seen a 32.8% decrease over the past 24 hours, settling at $0.118 from its peak of $0.176 at 5:00am UTC on April 24, according to CoinGecko.
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Additional reports were provided by Geraint Price, Sam Bourgi, and Felix Ng.
Published At
4/25/2024 10:16:44 PM
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