SEC Launches Legal Campaign to Classify Ethereum as Security
TLDR:
- The SEC has reportedly launched a legal campaign to classify Ethereum as a security, per Fortune.
- This development poses a setback for the crypto industry, hindering hopes for Ethereum ETF approvals.
- The investigation targets the Ethereum Foundation, focusing on interactions post-transition to “proof-of-stake” governance in 2022.
The US Securities and Exchange Commission (SEC) has initiated a robust legal campaign aimed at classifying Ethereum as a security, Fortune reports.
This development deals a significant blow to the cryptocurrency industry, particularly as hopes were high for the SEC to approve Ethereum ETF applications, especially following the greenlighting of several Bitcoin ETFs earlier this year.
The SEC’s investigation into Ethereum involves compelling companies to furnish documents and financial records related to their dealings with the Ethereum Foundation.
According to sources familiar with the matter, the SEC’s scrutiny of the Ethereum Foundation commenced shortly after the blockchain transitioned to a new governance model called “proof-of-stake” in September 2022.
Subpoenas issued by the SEC are narrowly targeted and primarily focus on the Ethereum Foundation.
In response to Fortune’s inquiry, the SEC declined to provide comment, stating, “The SEC does not comment on the existence or absence of a potential investigation.”
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