SEC and Gensler: Ether Was Security for a Year! 😱🔒

United States Securities and Exchange Commission and Gary Gensler Perspective on Ether (ETH)

Recent findings suggest that the United States Securities and Exchange Commission (SEC) and its Chair Gary Gensler held the belief that Ether (ETH) could be classified as a security for a prolonged period, as per a recent complaint.

An investigation into “Ethereum 2.0” was initiated by the SEC Director of Enforcement Gurbir Grewal on March 28, 2023, concerning potential offerings and sales of securities, including ETH, dating back to at least 2018, without a registration statement in effect or available exemption.

SEC’s Perception of ETH as a Security

The complaint indicates a contradiction with the SEC previously approving ETH Future ETFs in October 2023.

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Some folks are confused, as to why the SEC “Eth is a security timeline” and the “Futures ETF” is bad for the SEC.

Here’s a quick breakdown of why it paints Gensler into a corner:

— Adam Cochran (adamscochran.eth) (@adamscochran) April 29, 2024

Gensler, who has maintained silence on this matter, has been under scrutiny for the agency’s actions.

Back in June 2028, the SEC’s then-Director of Corporation Finance, Bill Hinman, delivered a speech asserting that ETH did not fall under the securities classification.

The SEC is currently probing Consensys regarding the nature of its ETH sales and has requested a statement from Consensys explaining why these sales should not be considered as securities transactions.

SEC’s Potential Actions Post Ethereum 2.0 Investigation

Prior to the recent court filings, a blockchain development company filed a lawsuit against the SEC for its efforts to regulate ETH as a security.

Today, Consensys filed a lawsuit against the Securities and Exchange Commission.

The goal behind this is to ensure that Ethereum remains a vibrant and indispensable blockchain platform and to preserve access for the countless developers, market participants, and institutions…

— Consensys (@Consensys) April 25, 2024

In a blog post by Consensys founder Joe Lubin, he argued against the SEC’s move to extend its jurisdiction to regulate the future of the internet and highlighted the disruptive impact on developers, market participants, and institutions using Ethereum.

Recent reports have surfaced about companies associated with the Ethereum Foundation receiving subpoenas for information disclosure to a Swiss non-profit.

Furthermore, in March, a communication in the foundation’s GitHub repository hinted at contact from an unidentified state authority.

Given these developments, it seems inevitable that the SEC will pursue legal action against Consensys in the near future.