On-chain data recently showed that the Ethereum staking has experienced significant growth over the last month. This undoubtedly presents a bullish outlook for the Ethereum ecosystem, which is already oozing with a lot of bullish sentiment heading into July. 

Almost 60,000 Unique Depositors Join Ethereum Network

Data from the on-chain analytics platform CryptoQuant shows that 59,894 new depositors have joined ETH’s staking network since May 20. Interestingly, this significant increase began around the time Bloomberg analysts James Seyffart and Eric Balchunas increased their approval odds for the Spot Ethereum ETFs to 75%. 

This again highlights the Spot Ethereum ETFs’ positive impact on ETH, although they haven’t begun trading. Thanks to these funds, the network has achieved a 4% increase in staking participation in just over a month. Increased staking participation is bullish for ETH, making the network more decentralized. 

Furthermore, the increase in the number of new depositors will also reduce ETH’s already dwindling circulating supply since these depositors have to lock up a significant amount of ETH to become validators on the network. Data from Dune Analytics shows that over 33 million ETH is locked up, representing almost 28% of Ehereum’s total supply. 

ETH’s Supply Side Paints A Bullish Picture

A reduction in Ethereum’s circulating supply is a bullish fundamental since it helps reduce the impact of any potential selling pressure on the crypto token. The positive impact of these locked-up tokens also becomes more evident as the demand for Ethereum increases since ETH’s price will bow to the dynamics of supply and demand. 

ETH’s distribution also paints a bullish picture for the crypto token. Data from the market intelligence platform IntoTheBlock shows that about 78% of ‘s supply, including staked ETH, is held by long-term holders, those who have been holding the crypto token for over a year. 

This shows that Ethereum’s supply is concentrated in the hands of individuals who are unlikely to offload their holdings anytime soon. This is significant, considering institutional investors are set to increase ETH’s demand once the Spot Ethereum ETFs begin trading. These funds are expected to start trading this month. 

Balchunas recently suggested that these Spot Ethereum ETFs could begin trading soon after July 8. Balchunas and Seyffart had previously predicted that these funds could begin trading by July 2. However, Balchunas noted that the Securities and Exchange Commission (SEC) had taken extra time to get back to the Spot Ethereum ETF issuers, so they had to change their timeline for when these funds would launch. 

Bitwise’s Chief Investment Officer Matt Hougan recently predicted that these Spot Ethereum ETFs could attract $15 billion in their first 18 months of trading. 

At the time of writing, ETH is trading at around $3,470, up over 2% in the last 24 hours, according to data from CoinMarketCap. 

Featured image created with Dall.E, chart from Tradingview.com

The US Securities and Exchange Commission (SEC) has intensified its legal battle with the crypto industry by filing a lawsuit against ConsenSys, a blockchain firm known for its MetaMask wallet product and its focus on the Ethereum network. 

The SEC alleges that ConsenSys violated federal securities laws by operating as an unregistered broker and dealer while offering services for “crypto securities,” amassing fees exceeding $250 million. 

SEC Lawsuit Against ConsenSys 

The SEC’s lawsuit against ConsenSys echoes similar complaints against other crypto firms such as Coinbase and Kraken. However, what sets this lawsuit apart is the context surrounding ConsenSys’ response to the SEC’s actions. 

In April, ConsenSys filed a lawsuit against the SEC after receiving a Wells notice seeking clarity on whether Ethereum should be classified as a security. Just recently, ConsenSys announced the closure of the SEC’s “Ethereum 2.0” investigation, interpreting it as an indication that Ethereum fell outside the agency’s jurisdiction. 

Notably, the SEC did not name Ethereum as one of the unregistered securities offered by ConsenSys in Friday’s filing, which may have led to the approval of the Ethereum ETF applications by the world’s largest asset managers on May 23.

Crypto Industry’s Regulatory Battle

ConsenSys, founded by Joseph Lubin, one of Ethereum’s developers, distinguishes itself from previous SEC targets. Rather than operating as an exchange, ConsenSys focuses on software development, including the MetaMask digital wallet. 

The SEC’s lawsuit argues that the firm violated securities laws by enabling the “swapping” of crypto assets through MetaMask. Particularly, the agency has targeted Ethereum staking services, namely Lido and Rocket Pool, alleging that their tokens, stETH and rETH, respectively, are unregistered securities.

The SEC further claims that ConsenSys facilitated over 36 million crypto asset transactions, including at least 5 million involving what the agency deems to be securities. 

Previously, the SEC had brought similar charges related to staking against Kraken, resulting in a $30 million settlement, while Coinbase has contested the charges.

While the new SEC complaint against the blockchain firm does not classify Ethereum as a security, it represents another front in the SEC’s ongoing campaign against major players in the crypto industry. 

Many within the crypto community may view this as a partial victory, given the absence of Ethereum’s inclusion as an unregistered security. However, the lawsuit further highlights the regulatory uncertainties surrounding the industry’s top companies. 

ConsenSys, currently engaged in an ongoing lawsuit against the SEC in Texas, criticized the agency’s actions, accusing it of pursuing an “anti-crypto agenda” through arbitrary enforcement actions and regulatory overreach.

At the time of writing, ETH was trading at $3,777, down 2.3% in the past 24 hours as the crypto market continues to experience significant selling pressure. 

Featured image from DALL-E, chart from TradingView.com