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The Securities and Exchange Commission (SEC) led by Gary Gensler began investigating the security status of ethereum last year, according to an April 29 report. court presentation by Consensys.
The filing revealed that Gurbir Grewal, Director of the Enforcement Division, sanctioned the Formal Investigation Order on 'ethereum 2.0' in March 2023. This Formal Order conferred broader authority on the SEC staff to investigate and subpoena individuals and entities involved in eth transactions. .
He added:
“The Formal Order bases this delegation on information from the SEC showing possible offers and sales, since at least 2018, of 'certain securities, including, but not limited to, eth, for which there was and is no registration statement in effect. . . and for which there was and is no exemption available.'”
The SEC has subsequently issued subpoenas to numerous individuals and entities with investments in ethereum, including Consensys.
Notably, this revelation emerged a few days after Consensys filed legal action against the SEC on April 25. The company argued that the SEC's attempt to classify ethereum as a security represented regulatory overreach, warning that such a designation could stifle innovation and negatively impact developers. , investors and entities that use ethereum's decentralized infrastructure.
The Regulatory Status of ethereum
ethereum's regulatory status has been a persistent issue for the SEC in recent years.
In 2018, Gensler stated during a conference at the Massachusetts Institute of technology that eth is not considered a security.
However, Gensler's stance appears to have changed, particularly after ethereum's transition to proof-of-stake. Despite this, he has refrained from definitively addressing the status of eth, despite numerous inquiries from interested parties, including members of Congress.
While Gensler has remained silent on the matter, proponents of the crypto community have cited comments from former SEC officials such as Bill Hinman, as well as legal filings from financial regulatory bodies such as the Commodity Futures Trading Commission, to argue that ethereum does not meet the requirements. Criteria for classification as value.
