• The Lido token (LDO) price dropped 10% after reports of the SEC issuing Wells Notices to the biggest Ethereum staking provider.
• David Hoffman of Bankless walked back his statement that Lido had received a Wells Notice.
• The SEC may be increasing its investigation into Ethereum and cryptocurrency staking.
SEC Investigating Ethereum and Cryptocurrency Staking
The U.S. Securities and Exchange Commission (SEC) may be increasing its investigation into Ethereum and cryptocurrency staking, as rumors circulated on Saturday that the agency had issued a Wells Notice to the largest Ethereum staking provider, leading to a 10% drop in the value of Lido’s LDO token.
What is a Wells Notice?
A Wells Notice is a letter from the SEC outlining potential charges that might be filed against the receiver. If accurate, this suggests that the SEC is tightening its scrutiny on cryptocurrency projects, including those related to staking services such as Lido DAO (decentralized autonomous organization).
David Hoffman’s Retraction Statement
David Hoffman of Bankless initially said he’d heard that Lido and other crypto projects had been issued with Wells Notices on Friday, however he quickly retracted his statement; “While there is at least one confirmed Wells Notice that *has* gone out recently, that *isn’t* known to the public, the idea of a mass recent carpet bomb isn’t correct” he stated before adding “Members of the Lido team have reached out to me and said that this is false.”
How Would The SEC Have Notified?
It remains unclear how exactly would the SEC have notified Lido if it did issue them with a Wells Notice; technically,the staking service is run by an autonomous organization which means there is no central authority in charge of decision making processes when it comes to these tokens.
Conclusion
As rumours are still circulating regarding whether or not they received an official notice fromt he SEC but until then investors will remain cautious about their investments in Enthereum and crypto currency based projects like Lido DAO .