SEC Subpoenas Firms Dealing with Ethereum Foundation: Report
The U.S. Securities and Exchange Commission (SEC) has reportedly issued subpoenas to firms that have had dealings with the Ethereum Foundation, according to sources cited by Fortune. The subpoenas are said to be highly specific to the Ethereum Foundation, with some companies receiving them recently and others receiving them after Ethereum’s transition to a proof-of-stake (PoS) consensus system in September 2022, known as “The Merge.”
The SEC’s investigations also require firms to provide documents and financial records related to their interactions with the Ethereum Foundation. The Ethereum Foundation, based in Switzerland, is a non-profit organization responsible for the development and management of the Ethereum blockchain.
Implications for Ether Classification as Security
This move by the SEC raises questions about whether it is part of a broader effort to classify ether as a security. This could potentially impact the approval of spot ether exchange-traded funds (ETFs) in the coming months. The SEC has already delayed its decision on approving several spot ether ETFs, including Van Eck’s, which has been postponed until May 23. The odds of a May 23 approval have plummeted to just 28% according to some industry leaders.
In a statement following The Merge, SEC Chair Gary Gensler indicated that tokens in a PoS consensus system could be considered securities since investors rely on the efforts of others to make a profit.
Hot Take: SEC Turns Its Attention to Ethereum Foundation
The U.S. Securities and Exchange Commission (SEC) has launched an investigation into firms that have dealt with the Ethereum Foundation, signaling a potential crackdown on the classification of ether as a security. The subpoenas issued by the SEC are highly specific to the Ethereum Foundation and have required companies to provide documents and financial records related to their interactions with the foundation. This move by the SEC raises concerns about the approval of spot ether exchange-traded funds (ETFs), as the regulator has already delayed its decision on several ETF applications. The odds of an approval on May 23 have dropped to just 28% according to industry insiders.
Key Points:
- The SEC has issued subpoenas to firms dealing with the Ethereum Foundation
- The subpoenas are highly specific to the Ethereum Foundation
- Firms are required to provide documents and financial records related to their interactions with the Ethereum Foundation
- This move raises questions about whether ether will be classified as a security
- The approval of spot ether ETFs may be impacted by this investigation
- SEC Chair Gary Gensler previously indicated that tokens in a PoS consensus system could be considered securities
Background: Ethereum Foundation and The Merge
The Ethereum Foundation is a non-profit organization based in Switzerland that is responsible for the development and management of the Ethereum blockchain. In September 2022, Ethereum underwent a transition to a proof-of-stake (PoS) consensus system known as “The Merge.” This transition raised questions about the classification of ether as a security, as investors rely on the efforts of others to make a profit in a PoS system.
Implications for Spot Ether ETFs
The SEC’s investigation into firms dealing with the Ethereum Foundation has significant implications for the approval of spot ether exchange-traded funds (ETFs). The regulator has already delayed its decision on several spot ether ETF applications, including Van Eck’s, which was postponed until May 23. However, industry insiders now estimate the odds of approval on May 23 to be just 28%. If ether is classified as a security, it could further delay or potentially prevent the approval of spot ether ETFs.
Hot Take: SEC Investigation Casts Doubt on Spot Ether ETF Approval
The U.S. Securities and Exchange Commission (SEC) has turned its attention to firms that have had dealings with the Ethereum Foundation, signaling a potential crackdown on the classification of ether as a security. The subpoenas issued by the SEC are highly specific to the Ethereum Foundation and require firms to provide documents and financial records related to their interactions with the foundation. This move raises concerns about the approval of spot ether exchange-traded funds (ETFs), as the SEC has already delayed its decision on several ETF applications. The odds of an approval on May 23 have dropped to just 28% according to industry insiders.
Sources:
Fortune,
The Block,
The Block,
The Block,
The Block,
The Block,
The Block
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