SEC Initiates Inquiry On Ethereum Foundation

The US Securities and Exchange Commission (SEC) has initiated an inquiry into companies' interactions with the Ethereum Foundation as part of a review of certain aspects of Ether, the world’s second-largest cryptocurrency.

The recent Ethereum inquiry by the SEC could signify a significant escalation by Wall Street’s primary regulator in its multiyear crackdown on the cryptocurrency industry.

Gillian Tan, Allyson Versprille, and Olga Kharif, who reported for Bloomberg News, cited sources familiar with the matter.

The recent inquiry by the SEC could signify a significant escalation by Wall Street’s primary regulator in its multiyear crackdown on the cryptocurrency industry. The agency’s chairman, Gary Gensler, has stated that many digital assets are unregistered securities subject to SEC regulations.

However, he has not explicitly stated whether Ether falls into that category.

A determination that Ether is a security would have widespread implications for the broader crypto market, given the extensive use of the Ethereum blockchain by developers across the industry.

Meanwhile, major investment firms are seeking SEC approval to list exchange-traded products based on Ether.

Although Gensler has refrained from definitively categorizing Ether, he has indicated that a particular feature of Ethereum software could potentially bring Ether under SEC jurisdiction.

Such a determination would trigger a slew of compliance and investor protection regulations, which many in the crypto industry argue are unsuitable for digital assets.

One of the sources disclosed that a subpoena from the regulator requested additional information about various aspects of the Ethereum Foundation. The full scope of the requests was not immediately clear. Lydia Beyoud also contributed to the report for Bloomberg News.

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