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Just before approving the highly anticipated Ethereum ETF in the United States, the US SEC officially declared Ethereum not a security, prompting an increase in the price of Ethereum and Lido DAO, a prominent platform offering a liquid staking solution for Ethereum.
According to a June 18th blog post from ConsenSys, the leading blockchain and web3 software company behind the Metamask wallet, the U.S. Securities and Exchange Commission (SEC) notified ConsenSys that it is prepared to conclude the inquiry into Ethereum's classification as a security.
SEC Investigation Into Ethereum 2.0 Ends
This favorable development for the entire crypto community followed Consensys' lawsuit against the SEC on April 25, 2024, to protect the Ethereum ecosystem. The lawsuit sought a court order to stop the SEC's investigation, arguing that Ethrer is a commodity and, thus, the SEC does not have the authority to investigate or regulate it.
During that period, the blockchain software company stated that they took this action for two main reasons: first, they believed that the SEC should not have the authority to expand its oversight to include regulating the future of the internet by incorrectly categorizing ETH as a security.
Second, they argued that the SEC's hasty approach was confusing for developers, market participants, institutions, and nations that are either constructing or currently managing critical systems operating on Ethereum.
While the SEC's closure of the Ethereum investigation under Gary Gensler's leadership is significant for the blockchain ecosystem, the company emphasized its ongoing quest for clear clarification.
…it’s not a cure-all for the many blockchain developers, technology providers, and industry participants who have suffered under SEC’s unlawful and aggressive crypto enforcement regime.
Ethereum Price Soars After SEC Clears It of Security Concerns
Following this exciting development, the price of Ethereum (ETH) saw a healthy bounce, rising by over 3% and nearing the $3,600 level once again. After reaching a weekly low of $3,381, the price of Ethereum has shown a strong recovery.
Interestingly, large investors, referred to as whales, are returning to purchase Ether tokens following a period of instability.
According to on-chain data provider Santiment, a whale has withdrawn 16,604 ETH, valued at $58.6 million, from the Binance cryptocurrency exchange over the past nineteen days. The whale acquired the coins at an average price of $3,600.
The large investor bought an additional 5,603 ETH, worth $19.7 million, an hour after the SEC announced the permanent suspension of the investigation into Ethereum 2.0.
The SEC's decision serves as a green light for the Ethereum ecosystem. It means they don't consider Ethereum a security, which is a good thing. In simpler terms, it's not treated like an investment contract like a stock. This could make Ether more attractive to investors in the long run, which could help its price keep rising.
Lido DAO Sees Increased Interest After the Positive News
The recent progress further includes the noteworthy performance of Lido DAO (LDO). Within the past 24 hours, the price of LDO has risen by more than 20%, bouncing back from $1.94 yesterday to $2.38 at press time.
Lido DAO (LDO) daily chart (Source: Coinmarketcap.com)
Staking services like Lido DAO allow people to stake their ETH and obtain stETH (Lido-staked ETH) tokens.
The SEC decision is good news for Lido DAO because it removes some of the confusion about staking Ethereum. With things clearer, more people might be interested in staking, which could benefit Lido DAO.
