According to media reports and indirect indications, representatives of the U.S. Securities and Exchange Commission (SEC) launched an investigation into Ethereum to recognize it as a security.
Several U.S. companies received subpoenas from the SEC demanding documents and financial reports related to their interaction with the Ethereum Foundation, Fortune reports. The regulator’s current actions are reportedly related to its intention to recognize ETH as a security.
The Ethereum Foundation investigation is indirectly confirmed by the fact that a message missing from the organization’s website stated that the foundation isn’t under confidential investigation. The missing message also said that the foundation intends to publicly disclose any government requests beyond normal business transactions. Pablo Pettinari, Frontend Developer working on the Ethereum Foundation website, reported this in comments on GitHub.
Experts note that the regulator’s actions may be an attempt to delay the issuance of spot Ethereum ETFs. Eleanor Terrett, Journalist for Fox Business, expressed this opinion. Against this background, Bloomberg analysts lowered the chances of approval of financial instruments by May from 70% to 25%.
Lawmakers in the U.S. also expressed dissatisfaction with the SEC’s inconsistent and contradictory actions. Patrick McHenry, Chairman of the House Financial Services Committee, said that Gary Gensler can’t make up the SEC’s jurisdiction as he goes along. Brian Quintenz, ex-Member of the Commodity Futures Trading Commission, noted that the SEC already explicitly recognized the status of ETH when it approved the issuance of Ethereum futures ETFs in 2023. He dismisses the argument that the SEC’s stance on ETH changed due to the transition to the Proof-of-Stake algorithm, as this event preceded the approval of Ethereum futures funds.
The U.S. Congress questioned the SEC’s authority to regulate the cryptocurrency market as early as last year. Still, after several public hearings, the situation remained unchanged. In February 2024, representatives of crypto exchange Kraken again raised concerns that the regulator’s actions were beyond its authority.
