Ethereum

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The US Congress may put ethereum (<a href="https://crypto.news/price/ethereum/" data-type="URL" data-id="https://crypto.news/price/ethereum/">ETH</a>) in a new category with less burdensome regulations than securities or group it with bitcoin (<a href="https://crypto.news/price/bitcoin/" data-type="URL" data-id="https://crypto.news/price/bitcoin/">BTC</a>) as a commodity, JPMorgan strategists suggest. The theory arises after the SEC&#8217;s ongoing debates on Ethereum&#8217;s nature as a security.



As debates around crypto regulations persist, ethereum stands at a regulatory crossroads. 



The Block <a href="https://www.theblock.co/post/235092/jpmorgan-ethereum-eth-other-category" data-type="URL" data-id="https://www.theblock.co/post/235092/jpmorgan-ethereum-eth-other-category" target="_blank" rel="noopener">reported</a> that a novel prediction from JPMorgan strategists, led by Nikolaos Panigirtzoglou, suggests that Congress might classify ethereum differently from its current status.



Instead of tagging it along with bitcoin as a commodity, Ethereum might land in a new &#8216;other category&#8217;, potentially bearing fewer regulatory burdens than securities.



<h2 class="wp-block-heading" id="strong-understanding-the-8216-hinman-documents-8217-strong">Understanding the &#8216;Hinman Documents&#8217;</h2>



The &#8220;other category&#8221; concept originates from the <a href="https://crypto.news/hinman-documents-to-be-made-public-in-ripple-vs-sec-lawsuit/">Hinman documents</a> recently revealed in an ongoing SEC enforcement lawsuit against <a href="https://crypto.news/ripples-top-legal-comments-on-recently-revealed-hinmans-speech/">Ripple Labs</a>. 



The documents date back to a 2018 speech by Bill Hinman, the then director of the SEC&#8217;s Division of Corporate Finance, arguing that Ethereum was not a security due to its &#8220;sufficiently decentralized&#8221; nature.



However, these documents also reveal particular concerns raised by some SEC officials, pointing out that classifying tokens on a sufficiently decentralized network as non-securities might create a regulatory gap. The &#8220;other category&#8221; was first mentioned as a potential solution.



Interestingly, SEC Chairman <a href="https://crypto.news/bill-to-dismiss-sec-chairman-gary-gensler-gains-support/">Gary Gensler</a> has refrained from clearly stating whether he considers ether security. 




 
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His previous statements suggest that all cryptocurrencies besides bitcoin could be considered securities, yet he hasn&#8217;t directly addressed ethereum&#8217;s status following the &#8216;Hinman documents&#8217; release.



<h2 class="wp-block-heading" id="potential-impact-on-ethereum">Potential impact on ethereum</h2>



JPMorgan&#8217;s strategists suggest that the Hinman documents might strengthen ethereum&#8217;s argument against being labeled as a security. However, they note this won&#8217;t directly affect Ripple, which is currently involved in a lawsuit with the SEC.



Yet, if Ripple successfully argues that they weren&#8217;t given fair notice about being classified as a security, it could impact the SEC&#8217;s future enforcement actions. Other crypto entities might use this precedent to argue they weren&#8217;t given fair notice.




 
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US Congress may chart new regulatory path for ethereum

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