GM DOers!
Ethereum got kicked in the balls this weekโฆ hard. ๐ซฃ
First up, we found out that the Ethereum Foundation is being investigated by a state authority.
Secondly, the SEC has delayed their decision on VanEckโs spot ETF application โ but we were expecting that.
Thirdly, the Chairman of the U.S. House Committee on Financial Services says that the SEC and Gary Gensler are looking to classify $ETH as a security. ๐จ
Ouchโฆ Thatโs some hard kicks. But letโs debunk each one to see if any of this FUD has any substance.ย
P.S. - At the end, Iโm sharing what Iโm doing with my $ETH, so you know how to put it to work.
P.S.S. - Weโre also highlighting the NFT Of The Month, so stick around.
Letโs go. โฌ
The Ethereum Foundation has just entered the crosshairs of the SECโฆ Again.ย
Earlier this week, a so-called โWarrant Canaryโ, aka the colorful bird below, disappeared from Ethereum Foundationโs website.
This bird was basically a way of telling people that the Foundation has not received any actions (i.e. lawsuits) or requests (i.e. subpoenas) from the government or law enforcement authorities.
With it gone, it suggests, in a discreet way, that the Ethereum Foundation has been approached by government authorities.
In the GitHub code, the dev who removed this canary left a note saying โthis commit removes a section of the footer as we have received a voluntary enquiry from a state authority that included a requirement for confidentialityโ.
In other words, the FBI is knocking on the door.ย
This is part of a larger investigation into Ethereum, which apparently started after the merge (from proof-of-work to proof-of-stake).ย
A report from Fortune indicates that the SEC is requesting documents from several U.S. firms to support the argument that $ETH should be considered a security.
Now, thereโs basically 2 explanations for this investigation.ย
1/ Itโs completely normal for the SEC to do their due diligence, especially with a final decision on several ETF applications coming up in May.ย
Besides, crypto firms are pretty used to getting subpoenas from the SEC by now.ย
2/ This is a coordinated attack against Ethereum, and a way for Gary Gensler and the SEC to find reasons why they should deny the ETF in May.ย
The latter is obviously what most crypto people think is going on here.
Regardless, the SEC chose to delay their decision on VanEckโs spot Ethereum ETF application, something everyone was expecting either way.ย
The main deadline weโre watching for in regards to the spot ETH ETF is May 23rd.
Analysts from Bloomberg and prediction markets are estimating a 25% likelihood that the approval will happen in May.
Itโs not looking good, and before the approval can happen, the SEC needs to officially admit that $ETH isnโt a security.ย
Honestly, I barely understand what a security is.ย
But if Ethereum gets slapped with that label, I know it means a lot more rules and paperwork for anyone wanting to play with it โ kind of like needing a permit to throw a Frisbee in the park.ย
I also know itโs going to be bad news for my bags. ๐
So Iโll let Paul Grewal, the Chief Legal Officer at Coinbase tell us whether or not Ethereum is a security.ย
TL;DR, he says itโs not. Here are a few reasons why.
1/
2/
3/
4/
5/
This point is actually pretty important, and sustained by Brian Quintenz, the Global Head of Policy at a16z.
6/ย
Conclusion
1/ Stop worrying!ย
2/ Ethereum is not a security (I think we established that above).
3/ Ethereumโs ETF is coming this year
Even if the ETF applications get denied in May, thatโll only lead to a bunch of lawsuits against the SEC, which will lead to an inevitable approval at some point.ย
4/ Zoom out. The world's largest asset manager, BlackRock, is building on Ethereum.ย ย
Clearly, $ETH is undervalued at todayโs prices, so keep stacking, put your coins to work and chill. Hereโs what Iโm doing right now.
Also, hereโs a SUPER helpful guide put together by our G.O.A.T community member Kuba, on how to navigate LRTs (liquid restaking tokens).
If youโre not already in our Discord, then WTF are you doing? Join us now!ย
Plooshies is a collection that showcases 3333 fully rigged and animated 3D models of 11 unique characters.
The project aims to bring childhood memories back to life through interactive storytelling.
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Thanks for reading. And remember, you're strong, youโre powerful, youโre alpha! โค๏ธ
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Kyle Reidhead
Good job