The political landscape could influence how the U.S. Securities and Exchange Commission (SEC) handles policies related to cryptocurrencies in the run-up to the 2024 elections, according to Consensys' senior counsel.
Speaking to Cointelegraph at the Consensus conference in Austin on May 29, Consensys senior counsel and head of global regulatory affairs Bill Hughes said it was still unclear whether the changing political and regulatory landscape in the US could affect the company's lawsuit against the SEC over Ether (eth). Over the past 30 days, lawmakers have advanced legislation requiring regulatory clarity at the SEC. The commission first approved the place for Ether exchange-traded funds, and the digital assets have been part of the actions of presidential candidates from both major parties before the elections.
“It remains to be seen what impact this has on the investigations (that the SEC) has open, their theories about what is or is not a securities offering in their opinion,” Hughes said, referring to the approval of ETFs at the time. counted from Ether. “We think it's a fundamentally positive development and a development that should not have been controversial at all.”
In April, Consensys filed a lawsuit against the SEC and its five commissioners in Texas over claims that they planned to “regulate eth as a security.” The company said it received a notice from Wells from the commission, warning of potential enforcement actions related to its MetaMask Swaps and MetaMask Stake products.
However, the lawsuit came before the SEC approved 19b-4 filings for several asset managers seeking to list and trade Ether spot ETFs on US exchanges, suggesting that the commission recognized in largely to eth as a commodity. Consensys' filings included statements from SEC Chairman Gary Gensler and head of the commission's enforcement division Gurbir Grewal, both of whom approved a formal investigation into Ether as a security.
“The political landscape is changing and the full impact that will have on commission decisions and staff work has yet to be seen,” Hughes said. “The real question is what the president and his two Democratic colleagues might be thinking now that they weren't two weeks ago.”
Consensys' lawyer speculated on the SEC's actions:
“I don't expect a wave of regulatory proposals like the one the industry has been suggesting for years. “(Approving Ether spot ETFs) may be the only thing they do that is seen as less antagonistic to cryptocurrencies than what they have normally been doing.”
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Lawmakers in the U.S. Senate will likely consider the Financial Innovation and technology for the 21st Century Act, or FIT21, within a year of its passage in the House of Representatives. The bill would clarify the SEC's role over digital assets, offering the Commodity Futures Trading Commission an avenue to regulate many tokens as commodities.
“We always believed that politics – perhaps not external to the SEC but within the SEC – was driving a decision to dictate certain policy choices,” Hughes said. “But whether there are external pressures for particular policy approaches that are impacting decision-makers at the SEC … how else that will filter down to different divisions remains to be seen.”
On June 5, Chairman Gensler suggested that the SEC would “take some time” to greenlight S-1 registration statements from asset managers applying for spot Ether ETFs, the final step before the exchanges could list and market investment vehicles. ETF analyst Eric Balchunas predicted that the launch date for Ether spot ETFs in the United States will be July 4.
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