Ether Soars as JPMorgan Foresees Regulatory Shift in Crypto Market

• The recent release of the Hinman papers from SEC’s lawsuit against Ripple is set to benefit ether (ETH) and promote decentralization in the crypto market.
• JPMorgan suggests that these revelations could explain why the SEC has not taken action against ether while targeting other crypto tokens this year.
• JPMorgan proposes placing ether in the same category as bitcoin (BTC), treating it as a commodity overseen by the CFTC and introducing a new “other category” specifically tailored to decentralized cryptocurrencies like ETH.

SEC Documents Boost Ether

The release of the Hinman papers in the SEC’s case against Ripple is expected to benefit ether (ETH) and promote decentralization in the crypto market. Emails associated with former Director of Corporation Finance William Hinman’s 2018 speech, which stated that ether did not resemble a security, were published last Tuesday by Ripple as part of its defense against the SEC lawsuit.

JPMorgan Foresees Regulatory Shift

JPMorgan’s research report highlighted that senior SEC officials did not categorize ether as a security in 2018. The report also noted that the SEC acknowledged the existence of an “other category,” recognizing that tokens on a sufficiently decentralized network no longer qualified as securities, thereby creating a regulatory gap. Nikolaos Panigirtzoglou, leading the team of analysts, referred to the Howey Test, which determines if transactions qualify as investment contracts under U.S. securities laws. The absence of a controlling group in ether contributed to its classification as “not a security.“

SEC’s Lack Of Action Against Ether

JPMorgan suggests that these revelations could explain why the SEC has not taken action against ether while targeting other crypto tokens this year. The Hinman documents are expected to influence ongoing congressional efforts to regulate the crypto industry, potentially preventing the designation of ether as a security.

Ether Placed In Same Category As Bitcoin

To streamline regulation, JPMorgan proposes placing ether in the same category as bitcoin (BTC), treating it as a commodity overseen by CFTC and introducing a new “other category” specifically tailored to decentralized cryptocurrencies like ETH. The level of decentralization would be determining factor in avoiding security classification.

Conclusion

The release of Hinman documents from SEC’s case against Ripple may lead to greater decentralization within crypto market and may prevent designation of Ether as security due to lack of control over Ethereum network according to Howey Test . JPMorgan proposes treating Ether similar to Bitcoin ,as commodity overseen by CFTC and introducing new „other“category for decentralized cryptocurrencies like Ether .