According to a report by Fortune magazine, the U.S. Securities and Exchange Commission (SEC) is conducting an investigation into American cryptocurrency companies. According to statements from American companies that have received subpoenas related to the investigation, the SEC is actively pursuing legal action with the aim of classifying Ether as a security. This news further dampens the industry’s hopes for the regulatory agency to approve applications for Ethereum spot exchange-traded funds (ETFs) from BlackRock and other companies.
The report indicates that the SEC began investigating the Ethereum Foundation around September 2022, shortly after the Ethereum network transitioned to a Proof-of-Stake (PoS) consensus mechanism. Additionally, sources have pointed out that the Ethereum Foundation has received subpoenas in recent weeks, which may explain why it removed the canary image earlier (although the claim of receiving subpoenas seems to contradict the Ethereum Foundation’s assertion of “voluntariness”).
While the release of this news caused a decline in ETH prices, many industry professionals believe that while it is not good news, it is not necessarily a terrible negative either, and the SEC’s determination that Ether is a security does not seem to be a novel development. The market also appears to have recognized this, as ETH prices have stopped falling and are currently rebounding.
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