SEC Is Trying to Classify Ether as a Security: Report
The United States Securities and Exchange Commission has reportedly issued several subpoenas to companies in connection with attempts to classify Ether as a security.
According to a March 20 Fortune report, the SEC's investigation into the Ethereum Foundation may give the commission regulatory cover to designate Ether (ETH) as a security. The foundation indicated via GitHub that it may be under investigation “from a government authority.”
Several companies in the US have reportedly received subpoenas from the SEC to provide documents and financial documents related to the Ethereum Foundation. According to people familiar with the matter, the Commission has launched a campaign to declassify ETH as blockchain moves from proof-of-work to proof-of-work in 2022.
While in office, SEC Chairman Gary Gensler refused to answer direct questions about whether ETH qualifies as a security under the commission's supervision, despite Bitcoin (BTC), Ether and others saying in 2018 that they are “not securities.” The commission has approved exchange-traded funds (ETFs) tied to Ether futures, but has yet to decide whether to approve or ban ETH ETFs — with many experts expecting a decision in May.
If Gary looks thin, it's because he's been eating nothing but his own words since 2018.
“Bitcoin. Ether. Litecoin Bitcoin Cash. Why did I name those four? They're not securities.”
Three-quarters of this market is probably not guaranteed. pic.twitter.com/wdgWcxw4h4
— Sam Lyman (@SamLyman33) June 12, 2023
Related: CFTC Chairman Warns of Conflict with SEC over Prometheum's ETH Game
Crypto firm Prometheum, one of the few firms to receive a license from US financial regulators as a special-purpose broker-dealer for digital asset securities, announced in February that it plans to provide institutional custody services for Ether. The ruling has put pressure on the SEC to provide clarification to firms seeking to avoid potential liabilities associated with certain crypto assets.
If the SEC moves forward with regulating Ether, it could put the regulator in conflict with the US Commodity Futures Trading Commission. Lawmakers have been trying to pass legislation to clarify the role of each regulator over digital assets, but no legislation has been passed at the time of publication.
Magazine: Ether EFAs Face Senate Opposition, Wright Satoshi Doesn't, And Denkun Goes Live: Hodler's Digest, March 10-16
