“The share of Lido in staked ETH has decreased further from around one third a year ago to around a quarter at the moment,” analysts led by Nikolaos Panigirtzoglou wrote.
The Hinman documents, which were released last June, “revealed the role of network decentralization in the SEC’s thinking on whether a digital token should be classified as a security or not,” the analysts wrote.
JPMorgan notes that officials from the Securities and Exchange Commission (SEC) had acknowledged in the past that “tokens on a sufficiently decentralized network are no longer securities as there is no controlling group in the Howey sense.”
The Howey Test relates to the U.S. Supreme Court case to determine whether a transaction qualifies as an investment contract. If a transaction is considered to be an investment contract, it’s classified as a security.
The recent Dencun upgrade should “help Ethereum to increase its dominance against alternative layer 1 blockchains and to recapture the lost market share due to previous scalability issues,” the report added.
Read more: Ethereum Could Face ‘Hidden Risks’ From Ballooning Restaking Market: Coinbase
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