A major lawsuit was recently filed by Ethereum developer Consensys against the US Securities and Exchange Commission (SEC), which could have significant implications for the cryptocurrency industry. The developer is aiming to establish that ETH should not be categorized as a security.

An investment bank, TD Cowen, commented that this legal battle is likely to be protracted, predicting that spot Ethereum ETFs will not receive approval before 2025. The bank's Washington Research Group, headed by Jaret Seiberg, emphasized that the litigation process will be lengthy.

Reports indicate that SEC Chairman Gary Gensler has deferred to the courts to determine whether ETH should be classified as a security or a commodity. This move is believed to be a strategy to clarify the regulatory framework around cryptocurrencies before potential legislation by Congress.

TD Cowen views Consensys' lawsuit in a positive light as it addresses crucial issues that need resolution. The bank noted the uncertainty stemming from Gensler's ambiguous stance despite past opinions from SEC officials that Ethereum does not fall under the category of a security.

The legal battle is expected to be drawn out, with TD Cowen pointing out that even if an interim injunction is granted, it may not be definitive. The bank also expressed skepticism about the court intervening in crypto regulatory matters given past controversies in the industry.

The choice of the Northern District of Texas for the lawsuit by Consensys, a court known for being less accommodating towards regulators, does not guarantee a swift resolution according to TD Cowen.

The investment bank remains skeptical about the SEC approving spot Ethereum ETFs in the near future, speculating that political and legal factors could delay the process until after the upcoming election. They argued that the approval timeline for an Ethereum ETF may be longer than that of a Bitcoin ETF due to different pressures on SEC Chairman Gensler.