Ether (ETH), the cryptocurrency that drives the Ethereum blockchain that supports smart contracts, dropped below $1,500 on Monday and reached its lowest point in almost a month in the $1460 range. The second-largest cryptocurrency in the world by market capitalization, which is currently trading in the $1,480 range, has lost more than 13% of its value from previous monthly highs in the $1,700 range. Even though gains like this can be rapidly reversed in the cryptocurrency markets, the coin is still up over 25% on the year.
Regulatory Issues Affect ETH
The market for cryptocurrencies is still being hurt by worries of strong US regulatory action. The US SEC is reportedly suing US-based BUSD stablecoin issuer Paxos Trust Co. for violating investor protection laws by marketing stablecoins as unregistered securities over the weekend, according to reports that surfaced. Given doubt about how investors can have a "expectation of profit" when purchasing a stablecoin like BUSD, which is intended to be price stable, the move has garnered a lot of criticism from the cryptocurrency community.
The SEC and Kraken reached a settlement, and as a result, Kraken shut down its crypto-staking platform, which it had also deemed to be an unregistered securities. Since the Ethereum blockchain switched to a proof-of-stake mechanism in September 2022, uncertainty has been present for Ethereum network validators due to US regulatory action against staking services in the US.
Director of business development for Lido Finance, the Decentralized Finance (DeFi) protocol's Decentralized Autonomous Organization (DAO). The SEC's decision to crack down on staking, according to Jacob Blish, may have unknowable repercussions for decentralized finance. The largest decentralized financial protocol, Lido Finance, provides ETH liquid staking services.
The largest US-based exchange, Coinbase, which also runs an ETH staking service, officials announced this weekend that they would "glad defend" staking in US courts.