Ethereum Loses 6% After Potential ETH Regulations
Cryptocurrencies are being regulated all over the world. But the second most important virtual currency in the market, Ethereum (ETH), lost 6% of its price amid regulatory issues. The US Securities and Exchange Commission (SEC), released a statement in which it explains that cryptocurrencies should be considered as securities.
Ethereum Loses 6% – Security or Commodity?
The second largest cryptocurrency by market cap lost over 6% on Tuesday due to the fact that governments bodies and other agencies are analysing whether digital assets should follow the same rules as regular stocks or not.
Regulators are investigating coin after coin to see which cryptocurrencies can be influenced by their creators or founders. The SEC and the US Commodity Futures Trading Commission (CFTC), will be discussing these issues on Monday.
As reported by The Wall Street Journal, Ethereum is under regulatory scrutiny. Additionally, the creation of this virtual currency is being questioned as ‘an illegal securities sale.’ For the regulators, the managers of Ethereum may have an influence on the price of the cryptocurrency, and this is being investigated.
At the moment, there is no unanimous position between the different regulators. The CFTC considers cryptocurrencies as commodities (exempting them from regulations from the SEC). But the SEC explained that it considers virtual currencies as securities but will have a gathering on May 7, 2018 to discuss the matter on whether Ethereum is or should be a regulated security.
SEC investigates ICOs…
Former CFTC official says Eth is a security…
NY AG investigates exchanges…
No ICO, no premine, no sale/ pre-sale or any other fundraising, fair launch, POW mined coin.
Not a security.
— Bruce (@brucefenton) April 27, 2018
Also, former US regulator:
“Strong case $ETH could be a noncompliant security since it was distributed in an ICO but may avoid securities classification, since its now mined”
Moreover, a former top regulator, told an audience that he thinks that Ethereum and Ripple are ‘noncompliant securities.’
What do you think this will do to the May 2018 Ethereum prices? How much impact will the ruling on the ETH classification have on its fate to survive its future as well as the upcoming EOS launch and the debate on EOS vs ETH continues to pick up the pace.
One thing is for certain, Ethereum is taking much of the regulatory heat off of the truly decentralized bitcoin (and bitcoin cash if you are some).