JPMorgan Predicts Increased SEC Regulation In The Digital Asset Space

A recent research report by JPMorgan Chase & Co. JPM highlights how the U.S. Securities and Exchange Commission (SEC) views most cryptocurrencies as securities.

This view extends to staking services, which the SEC views as similar to offering any other type of security.

The report, according to Coindesk, predicts that stablecoin issuers, custody and protection of investors' digital assets, and the unbundling of broker/trader/lending/clearing/custody activities will face increased regulatory actions.

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The bank also expects regular disclosure, reporting, and auditing of reserves, assets, and liabilities across major crypto entities.

These regulations will eventually lead to the "convergence of the crypto ecosystem towards the traditional financial system over time."

The staking business should shift towards direct staking for institutional investors and more towards decentralized alternatives for retail investors (decentralized finance, or DeFi, is an umbrella term for various financial applications carried out on a blockchain).

Ethereum ETH/USD will experience increased selling pressure following the forthcoming Shanghai upgrade, JPMorgan predicts.

Cryptocurrency exchange Kraken has 1.2 million ETH staked on the network, and a significant amount of this ETH is owned by its U.S. clients.

When adding the one million ether from staking rewards that could be withdrawn immediately after the upgrade, the downside risk to Ether becomes even more significant.

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