Consensys Criticizes SEC’s Crypto Approach Despite Ether ETF Approval

The recent approval of Ethereum ETFs by the U.S. SEC on May 23 has stirred the crypto market, initially fueling investor optimism. However, despite this milestone, Ethereum’s price experienced a drop, suggesting a cautious market response. Meanwhile, amid these developments, blockchain technology firm ConsenSys has voiced its concerns over the SEC’s regulatory practices, even as they welcome the Ethereum ETF approval.

ConsenSys Slams SEC’s Regulatory Tactics

ConsenSys has expressed mixed feelings regarding the SEC’s latest decision. While the approval of Spot Ether ETFs is seen as a positive step, the company criticizes the SEC’s inconsistent regulatory approach. 

In a recent statement on the X platform, ConsenSys highlighted that this last-minute approval exemplifies the SEC’s “troublesome ad hoc approach to digital assets,”. Notably, they argue this move unfairly targets the cryptocurrency market, while hindering innovation in the digital asset space.

In addition, the firm argues that no other industry faces such deliberate regulatory scrutiny, describing it as contrary to the rule of law and detrimental to market participants. Meanwhile, they assert that the approval indicates the SEC’s acknowledgment of Ethereum as a commodity, contradicting its previous stance, which they are currently challenging in court.

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Ongoing Legal Battle & Ethereum Performance

ConsenSys’s legal battle with the SEC continues as the company seeks to prevent the regulator from classifying ETH as a security. This lawsuit, filed in the District Court for the Northern District of Texas, aims to secure clear regulatory definitions that support the long-held view of Ethereum as a commodity. 

For context, ConsenSys received a Wells notice from the SEC on April 10, indicating possible enforcement actions against its MetaMask wallet product. ConsenSys disputes this, emphasizing that MetaMask is merely an interface that doesn’t manage assets or transactions. Besides, the firm argues that misclassifying Ethereum as a security could undermine its established role in the crypto market.

Meanwhile, the Ethereum market has reacted cautiously to the Ethereum ETF approval. Despite the positive initial response, the price of Ethereum has dipped, suggesting that investors are pausing before making further moves. 

As of writing, Ethereum price slipped over 3% and exchanged hands at $3,673.12, after touching a 24-hour high of $3,943.55. However, its trading volume over the last 24 hours rocketed over 99% to $47.6 billion, suggesting robust trading activity in the market.

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