Learn about new revelations regarding the U.S. Securities and Exchange Commission's (SEC) stance on Ether as uncovered in Consensys' lawsuit against the SEC. Recent court documents suggest that the SEC and its chair, Gary Gensler, believed Ether was an unregistered security trader out of compliance with federal regulations for at least a year. The disclosure sheds light on the SEC's "Ethereum 2.0" investigation and raises questions about regulatory clarity for cryptocurrencies like Ether.
Recent court documents filed by Consensys in its lawsuit against the U.S. Securities and Exchange Commission (SEC) have shed light on the SEC's stance on Ether and its regulatory actions regarding the cryptocurrency.
According to a report by Fox Business producer Eleanor Terret, the SEC and its chair, Gary Gensler, believed Ether was an unregistered security trader out of compliance with federal regulations for at least a year. This revelation contradicts prior SEC guidance under former Chair Jay Clayton, who stated in 2018 that Ether, along with Bitcoin, was not a security.
The disclosure comes in response to Consensys' filing of an unredacted complaint against the SEC, revealing details about the SEC's "Ethereum 2.0" investigation. The investigation, approved by the SEC's Division of Enforcement in March 2023, aimed to probe potential unregistered offerings and sales of Ether since at least 2018.
Anonymous sources familiar with the matter revealed that recipients of SEC subpoenas were instructed to maintain strict confidentiality regarding the investigation.
The timing of the "Ethereum 2.0" investigation coincides with Gensler's appearance before the House Financial Services Committee, where he refused to answer questions about the SEC's stance on Ether.
These developments raise concerns about regulatory clarity for cryptocurrencies like Ether and could impact the decision-making process for potential spot Ether exchange-traded funds in the U.S.
Analysts believe that Gensler's stance on Ether, as evidenced by his refusal to clarify its regulatory status, could influence the SEC's decision on approving such products. The revelation underscores the need for clear and consistent regulatory guidance in the rapidly evolving cryptocurrency market.
(HELEN PARTZ, COINTELEGRAPH, 2024)