⚠️🚨3 theories why the SEC may be eyeing down Ethereum: Crypto lawyer⚠️🚨
👉The regulator does not want to undermine its arguments in ongoing legal action against Coinbase and Binance.
The reported probe into Ethereum and its foundation could be a way for the securities regulator to comfortably deny spot Ether
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ETFs and satisfy senator blowback without undermining its ongoing lawsuits, according to a crypto lawyer.
On March 22, general partner of Van Buren Capital and finance lawyer Scott Johnsson offered his opinion on why the SEC may have reportedly launched its probe into Ethereum and the Ethereum Foundation.
One of the theories, according to Johnsson, is that the SEC could be using the probe to placate crypto skeptics who have demanded a tougher stance from the agency.
Earlier this month, Democrat senators Jack Reed and Laphonza Butler urged SEC chair Gary Gensler not to allow any further spot crypto ETF approvals. Senator Elizabeth Warren has also been extremely vocal in her disapproval of these investment products.
Another theory, which has gained more traction on X lately, is that the SEC could be using it as a way to deny spot Ethereum exchange-traded funds (ETFs) — as a non-correlation objection may not hold up.
“The SEC needs a non-correlation objection to deny ETH spot ETFs this year,” said Johnsson.
The crypto lawyer explains that denying spot ETH ETFs solely based on correlation analysis may be a temporary solution, as correlation levels are improving over time.
Correlation describes the difference between the prices on spot markets and futures and has been a key argument for the SEC for approving or denying crypto ETPs.
However, earlier this month, ETF analyst Eric Balchunas said that the “correlations between futures and spot isn’t as strong" before adding that he was “not nearly as optimistic here vs BTC ETFs.”
