Ethereum Reports: US Securities and Exchange Commission Wants to Classify it as a Security

According to media reports, the US Securities and Exchange Commission (SEC) is legally preparing to treat Ethereum (ETH) as securities. Ethereum ETFs probably have no chance of being approved for the time being.

After the Bitcoin ETFs will the Ethereum ETFs follow? These hopes in the crypto scene have suffered a serious setback, as the powerful US Securities and Exchange Commission (SEC) apparently has completely different plans for the world’s second-largest cryptocurrency. The business magazine “ Fortune ” reports that the SEC wants to work towards classifying Ethereum (ETH) as a security.

Shortly before, it became known that the Ethereum Foundation had received a binding request for information (“Subpoena”) from an unspecified government agency and had to treat it confidentially. This emerges from an entry from the official Ethereum channel on Github . According to Fortune, at least three companies that have contacts with the Ethereum Foundation have also received such subpoena. This instrument is anchored in the Anglo-Saxon legal system and also serves as a forewarning of investigations and possible legal action.

Read more about Ethereum and find the most improtant business news of the day with our companion app Born2Invest.

Ethereum ETFs: May approval appears to be on hold

The SEC has been concerned with the question of whether many cryptocurrencies should actually be treated as securities for years. In the case of Bitcoin (BTC), it decided to grant the crypto reserve currency a special status. This was part of the puzzle to pave the way for Bitcoin ETFs. However, if the SEC now zeroes in on ETH, it will be unlikely that the authority will soon approve Ethereum ETFs.

Here, optimists had May 23rd in mind as the date on which the SEC could “green light” multiple Ethereum ETFs at the same time. But doubts about it have recently increased. One reason: Before the approval of Bitcoin ETFs, the SEC sought discussions with market participants and applicants. A timeline from Bloomberg shows that the SEC is making no such preparations in the decision-making process for Ethereum ETFs that indicate launch.

Conclusion: Is the SEC taking the “nuclear card” against Ethereum?

In the US crypto scene, the term “nuclear card” is often used to describe a scenario in which the SEC would decisively work towards classifying cryptocurrencies as “securities”. In the Ripple (XRP) case , however, the SEC was unable to prevail after two and a half years of legal proceedings, so the first judgment from summer 2023 was symbolic.

Ethereum can claim that the SEC has already approved Ethereum Futures ETFs, which should not be possible for ETH as a presumed security. On the other hand, the origins of the number two cryptocurrencies with pre-mining and ICO provide evidence of profit intentions. In addition, the protocol change in Ethereum (“The Merge”) from September 2022 could play into the SEC’s hands because it made staking possible with ETH, which speaks for profit intentions.

Neither the Ethereum Foundation nor the SEC commented on the latest media reports. The price curve of ETH even recorded a daily increase of a good 12 percent – a possible explanation: If the SEC gets really serious and tries to place Ethereum under extensive regulatory requirements in the USA, the matter is likely to end up in court. With the experience from the Ripple process, this is no longer a nightmare for Ethereum and the crypto industry.

__

(Featured image by WorldSpectrum via Pixabay)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in BLOCK-BUILDERS.DE. A third-party contributor translated and adapted the articles from the originals. In case of discrepancy, the originals will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us