Alex Thorn, Principal Researcher at Galaxy Research, suggested that the SEC could distinguish between Ethereum (ETH) and staked Ether and classify the latter as a security. This distinction could provide a regulatory loophole for spot Ethereum ETFs to be approved. 📈🔍

Thorn noted that this could have implications for spot Ethereum ETFs, which the SEC has so far been reluctant to approve. According to Thorn, this change would align with the SEC's ongoing legal battles and investigations and provide consistency with its previous arguments and positions when approving Ethereum ETFs.

However, Thorn also emphasized that this approach may impose certain restrictions on spot Ethereum ETFs. He suggested that the SEC could ban ETFs from staking the ETH they own.

By distinguishing between ETH and staked ETH, the SEC can maintain a strict regulatory framework around staked assets and other altcoins while allowing the introduction of spot Ethereum ETFs.

Meanwhile, Ethereum's value rose more than 20% following news that the SEC might approve spot ETH ETFs, despite previous market consensus that approval was unlikely.