Ethereum is in the spotlight again, as everybody has been waiting for the final decision of the US regulators on whether to treat the cryptocurrency as a security. A few days ago, it was reported by WSJ that the SEC and CFTC officials are going to hold a meeting on May 7 to discuss the future regulation of Ethereum and Ripple.
However, there haven’t been any official announcements yet and it is unkonw if the meeting was held or not. Some internet users even considered the WSJ report to be misinformation, calling it fake news. It seems that no final decision on the cryptocurrency future will be made and according to Paul Vigna, the author of the article, it was just a regular working group discussion.
It's nothing that major. A "working group" meeting, not a public meeting. How'd we find out about it? The way we find out about everything. We, like, talk to people.
Investors, meantime, seem unconcerned and the market remains confident. Ethereum has been showing significant gains lately and managed to overcome a $750 barrier last week after being low for more than two months. The price, however, decreased by 7% on the regulatory news, but recovered then and is now standing at about $767, according to CoinMarketCap data.
The cryptocurrency has been on a downward trend since January, when its value hit an all-time record of $1,200. In just four months, Ethereum dropped to as low as $380 per coin. The price of its main rival, Bitcoin, experienced a severe decline as well, losing more than $10,000 from its $20,000 level recorded in December 2017.
One of the most evident reasons why Ethereum faced such a sharp decline is rising regulatory pressure. Earlier this year, the US authorities started a massive crackdown on Initial Coin Offerings due to their concerns over the high risk of fraudulent activities. Some governments even decided to completely ban all projects raising funds through ICOs. The thing is most of these projects are based on Ethereum smart contract technology, what has probably affected the price.
Although it is unknown how the market will react to the SEC ruling, the decision to regulate Ether as a security will likely lead to an increased investor demand. Meantime, Ethereum co-founder, Joseph Lubin, who now runs blockchain production studio ConsenSys, told TheStreet a few days ago he is confident that regulation is not needed.
“We spent a tremendous amount of time with lawyers in the US and in other countries, and are extremely comfortable that it is not a security; it never was a security,” he said. “I think we already have a regulatory scheme; securities laws in this country govern securities. If you fail the Howey test, you’re not a security,” he noted, referencing an assessment method used to determine whether an asset can be treated as a security.
“This is a way of accessing a shared compute resource, so I’m not sure Ether needs to be regulated in any way,” Lubin added.