The SEC’s Investigation into Ethereum Foundation: Is Ethereum a Security?
A recent report by Fortune has shed light on an ongoing investigation by the United States Securities and Exchange Commission (SEC) into the Ethereum foundation, with the aim of determining whether Ethereum should be classified as a security. According to Cointelegraph, the foundation has provided some indirect indications of a disclosed investigation.
SEC Targets US-Based Companies
The SEC has reached out to three prominent US-based companies to gather documents and financial records related to the Ethereum foundation. This information was made public by several industry insiders, who suggest that this interaction with the companies is part of a larger campaign to classify Ethereum as a security.
An anonymous office employee has confirmed that the investigation began shortly after Ethereum’s shift from Proof-of-Work to Proof-of-Stake in 2022, known as “the merge.”
Gary Gensler, the head of the SEC, has been unable to provide a clear answer regarding the classification of Ethereum. This lack of clarity is one of the factors contributing to the delay in approving an Ethereum Spot ETF.
In a statement made in 2018, Gensler classified Bitcoin, Ethereum, and others as “not securities.” However, he has now changed his stance and has not provided a definitive answer regarding Ethereum.
SEC’s Stance On Ethereum ETF
The chances of an approved Spot ETH ETF are decreasing over time. Analysts initially predicted a 50% chance of approval by the SEC in May but have since revised their estimates to less than 35%.
This delay is primarily due to Gary Gensler’s unclear decision on whether Ethereum should be classified as a security or commodity. The lack of clarity surrounding this topic suggests negative news for Ethereum supporters.
While the ETF tied to ETH futures has been approved, the approval for Spot Ethereum ETFs has been on hold for months. The final response on this matter has been pushed back to May.
This behavior by the SEC has drawn criticism from the crypto community, as well as from United States Representative French Hill. During a recent testimony, Congressman Hill alleged that the SEC, under Gensler’s guidance, had “blatantly and repeatedly” exceeded its statutory authority.
Final Thoughts
The ongoing drama with the SEC over the Ethereum Spot ETF is becoming increasingly concerning, with a higher chance of rejection. Initially, it was believed to be a done deal due to the popularity of Bitcoin Spot ETFs. However, with the continuous delays and lack of clarity from the SEC, expectations have been lowered. The new ruling on the Spot ETH ETF is expected in May, and we will have to wait and see how the SEC’s decision unfolds at that time.
Hot Take: The SEC’s Investigation into Ethereum Foundation
The SEC’s investigation into the Ethereum foundation has raised questions about whether Ethereum should be classified as a security. This ongoing investigation has created uncertainty within the crypto community and has led to delays in approving an Ethereum Spot ETF. The lack of clarity from Gary Gensler, the head of the SEC, regarding Ethereum’s classification has only added to this confusion. As we await the SEC’s decision in May, it remains to be seen how this investigation will impact Ethereum and its supporters.
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