Ethereum Foundation Under Investigation by Anonymous Government Authority
We have received a voluntary request for information from a government authority that included a confidentiality requirement.
Ethereum Foundation
The Ethereum Foundation, a central pillar of the Ethereum ecosystem and a non-profit organization based in Switzerland, is facing a delicate situation. According to recent information shared on its website’s GitHub repository, the organization is currently under the scrutiny of an unnamed government authority.
The details of this investigation remain shrouded in mystery, with both its scope and main objective remaining unknown to this day. The February 26, 2024, release on GitHub reveals that the organization has been contacted by a government authority:
Technological Shifts and Regulatory Expectations
This investigation comes at a time of technological change for Ethereum, the second-largest blockchain in terms of market capitalization, right after Bitcoin. Founded in 2015 following an ICO for its native token ETH, Ethereum has recently undergone a major technical upgrade, codenamed Dencun.
This revision aims to reduce transaction costs for users of Ethereum-based layer 2 solutions. Meanwhile, investors in the United States are eagerly awaiting the final verdict on the potential launch of an Ethereum Spot ETF, with a deadline set for the end of May for some applications.
Suppression of the Warrant Canary
Notably, a modification was made to the Ethereum Foundation’s website during the February 26 GitHub update, concerning the removal of its ‘warrant canary’. Traditionally, such an indicator is used to signal that a company has not received any secret government requests. The disappearance of this warning may suggest, without openly stating it, that the Foundation has been approached by a government authority. Although a similar incident in 2019 turned out to be an error, the current situation seems to indicate a more serious matter.
Speculations are already surrounding the motives behind this investigation. An attorney familiar with the case suggests to CoinDesk that the Ethereum Foundation may have received a documentation request from a Swiss regulator, in collaboration with the SEC.
The SEC is currently reviewing multiple applications for an Ethereum Spot ETF, although the prospects of approval seem to be dimming according to experts. The lack of interaction between applicants and SEC officials is often cited as a major hurdle. Moreover, it is plausible that other entities, beyond the Ethereum Foundation and outside of the United States, are also under surveillance.
