Ethereum News Today: Regulators focus on L2 Instability: Will stable performance keep up with scale?

Securities and Exchange Commission (SEC) Commissioner Hester Peirce warned that new regulatory provisions could be introduced against centralized protocols in the Ethereum Layer 2 ecosystem, citing recent disruptions and security breaches. Starknet suffered a three-hour freeze in September 2025 due to a failed upgrade, causing STRK's price to fall 3-5%. Arbitrum and Base also experienced similar disruptions, while ZKsync encountered a security breach in April 2025, causing the token price to fall by 20%. These events highlight centralized risks and smart contract vulnerabilities, prompting calls for enhanced governance and decentralization.