Ethereum Merge: SEC Raises Control Claims

On September 15, 2022, the Ethereum development team successfully completed the merger. Nevertheless, the event does not bring only positive developments. The Ethereum price still struggles to maintain crucial price levels. Additionally, Gary Gensler, Chief Securities and Exchange Commission (SEC) of the United States, uses the merger to bring cryptocurrencies under the control of the regulator.

The SEC could classify Ethereum and other cryptocurrencies as securities after the merger, reports the Wall Street Journal. Long legal processes such as Ripple are in the air. According to Gensler, the staking » through the crypto currencies and intermediaries is a crucial criterion for classifying courts.

Ethereum Merge: The SEC wants to master Crypto currencies

Gary Gensler told reporters after a congressional hearing:

“From a coin perspective, staking under the Howey Test is another indication that investors expect gains based on the efforts of others.”

To stake Ethereum, validators must deposit 32 ETH into the network and lock the ETH. Only after the Shanghai upgrade, which will take place 6-12 months after the merger, will the previously staked ETH be released again. This affects both ETH staked before the merger and ETH staked after the merger. Gary Gensler believes that staking is “very similar to lending” and should be compared to conventional investing.

Authorities have already targeted crypto companies like Coinbase, Circle, Gemini, Nexo and Celsius for crypto interest rate products. This has fueled discussions about the security ratings of crypto products and currencies. Crypto advocates have criticized the SEC for its action-oriented regulatory strategy and lack of regulatory guidance.

Ethereum Price: Falling Despite Merger

In addition to Gensler’s statements, there is more negative news about Ethereum. The long-awaited merger has not resulted in a significant price increase so far, quite the contrary. At the time the article was written (nearly 24 hours after the merger), the Ethereum price had fallen by around 10%.

According to data from CoinGecko, ETH rose from $1,641 to $1,454 after the merger and then stabilized again. The second-largest cryptocurrency by market capitalization is currently still around 70% off the last all-time high ($4,870).

At current prices, only 52% of ETH holders are still profitable, according to market data analyzed by IntotheBlock. This means that only 1% of ETH holders break even, while 47% make no profit. Despite the weak price action, signals from the stock market and the chain suggest that the ethereum price could increase again in the near future.

In addition to the ethereum price, the price of Bitcoin also fell by several percentage points. The price of BTC is currently below the $20,000 mark. Furthermore, the total crypto market cap hit a new monthly low of $1 trillion.

ETH Miners Switch to Ethereum Classic

1663808489 579 Ethereum Merge SEC Raises Control Claims

The shift to proof-of-stake has also forced ETH miners to look to other options such as Ravencoin and Ethereum Classic.

According to CryptoCompare, Ethereum Classic hash rate increased by 240% since the day of the merger, while the Ravencoin hash rate has increased by 51%. Additionally, Dogecoin is now the second largest Proof of Work coin behind Bitcoin.

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Ethereum Merge: SEC Raises Control Claims


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