This initiative is unfolding through an investigation that has seen U.S. companies involved with Ethereum receiving citations.
The citations aim to collect records on interactions with the Ethereum Foundation, which governs and develops Ethereum.
SEC Probes Ethereum Foundation in Legal Push
This dampens the crypto industry’s hope for Ethereum ETF approvals, following the SEC’s nod to Bitcoin ETFs. The implications of the SEC’s legal campaign are far-reaching, not just for Ethereum but for the broader crypto industry.
JUST IN: 🚨SEC is waging a legal campaign to classify Ethereum as a Security 👀
The SEC’s probe of the Swiss-based Ethereum Foundation began after ETH shifted to proof-of-stake in September of 2022
This hurts the chances of an Ethereum ETF by BlackRock ⚠️ pic.twitter.com/WFpVzFh3uS
— Simply Bitcoin (@SimplyBitcoinTV) March 20, 2024
Classifying Ethereum as a security could drastically change crypto regulations, limiting flexibility and innovation. So, the news disappoints firms like BlackRock, who were optimistic about SEC approval for Ethereum ETFs, signaling a significant crypto endorsement.
According to Coindesk, the probe was reportedly sparked by Ethereum’s transition to a “proof-of-stake” governance model in September 2022. A change from the more energy-intensive “proof-of-work” system. This move to greater efficiency for Ethereum has also attracted regulatory attention.
Here's whats going on with the #SEC and #Ethereum
Blackrock launches tokenized asset fund on the Ethereum blockchain.
Blackrock deposits $100 million $USDC on the Ethereum network.
I think what happened next is that the SEC was ordered by #Blackrock to pursue a legal campaign…
— Toby Cunningham (@sircryptotips) March 20, 2024
More About Ethereum & The SEC
The nature of the citations issued has varied, with some described as narrow and specifically targeted at the Ethereum Foundation. These legal requests have emerged in recent weeks, signaling an intensification of the SEC’s scrutiny.
🚨 BREAKING 🚨 Mike Novogratz dives into the "Great Debate" happening at the SEC — Is Ethereum a security?
His insight suggests an #Ethereum ETF approval is imminent, citing existing future products.
Do you agree with this analysis ? 🤔💭
Comment Below & Follow For More! 👇👇… pic.twitter.com/WLj7F54TYx— Good Morning Crypto (@AbsGMCrypto) March 13, 2024
This legal challenge from the SEC raises critical questions about the future of Ethereum and the broader implications for the cryptocurrency market. If Ethereum is designated as a security, the decision could set a precedent that affects numerous other cryptocurrencies and projects. Moreover, it may deter institutional investment in the crypto sector, given the added regulatory complexities and uncertainties.
As the situation unfolds, the crypto community and investors are watching closely.
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