SEC Aims to Classify Ether as a Security
20 Mar, 2024 ● Crypto News
The U.S. Securities and Exchange Commission (SEC) has been active in issuing subpoenas to various companies as part of its efforts to potentially classify Ether as a security.
A report from Fortune on March 20 highlighted that the SEC's scrutiny of the Ethereum Foundation might allow the regulatory body to categorize Ether as a security.
The foundation itself hinted at being under investigation by a governmental authority through a post on GitHub.
Several companies within the U.S. have received demands from the SEC to submit documents and financial records linked to their interactions with the Ethereum Foundation.
Sources indicated that this move is part of the SEC's initiative to consider ETH as a security, especially after Ethereum's shift from proof-of-work to proof-of-stake in 2022.
SEC Chair Gary Gensler, during his term, has avoided clear responses to queries about ETH's status as a security, despite previous comments in 2018 suggesting that Bitcoin, Ether, and similar assets were "not securities."
The SEC has greenlit ETFs based on Ether futures but remains undecided on spot ETH ETFs, with the crypto community anticipating a decision by May.
Crypto company Prometheum, which received U.S. regulatory approval as a special purpose broker-dealer for digital asset securities, announced its plans in February to provide institutional custody services for Ether.
This move has increased pressure on the SEC to clarify the regulatory framework for digital assets to help firms mitigate potential legal risks.
Any decision by the SEC to regulate Ether could lead to jurisdictional disputes with the U.S.
Commodity Futures Trading Commission (CFTC), as both regulators navigate the complex landscape of digital asset oversight.
Despite legislative efforts to define the regulatory scope for digital assets, no concrete legislation had been established at the time of reporting.
Sources:
https://cointelegraph.com/news/sec-ether-security-classification
