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The US SEC and its chairman, Gary Gensler, have considered ethereum a security for at least a year.
According ethereum-was-security-for-at-least-year” target=”_blank” rel=””>fox businessConsensys, which develops ethereum software, filed an unredacted complaint against the agency after this was revealed.
The document states that the ethereum 2.0 investigation was based on the SEC's belief that potential offers and sales of certain securities, including but not limited to eth, had occurred since at least 2018.
Consensys' lawsuit shows that the SEC has made multiple document requests over the past year asking for more details about the company's role in the proof-of-stake (PoS) upgrade and its purchases, holdings and sales of ethereum. The documents also show that the SEC may believe that ethereum sales even before the 2018 merger were securities.
The SEC's belief that ethereum is a security contradicts previous guidance under Chairman Jay Clayton. Additionally, in June 2018, then-CFO Bill Hinman stated in a speech the SEC's position that ethereum, along with bitcoin, is not a security.
Even before Gensler's testimony, the president's reluctance to give a definitive answer on ethereum's regulatory status set off alarm bells in the crypto industry. Many speculate that the ethereum merger has made the cryptocurrency more secure than the original consensus mechanism.
Consensys launched legal action against the SEC to prevent the regulator from overseeing the ethereum blockchain.
Consensys said its action against the SEC followed Wells' April 10 notice that the regulator was preparing to take enforcement action against the company regarding its MetaMask wallet services. The company emphasized that MetaMask is not a broker and “does not store clients' digital assets or perform any transactional functions.”