Coinbase hits hard. The platform has just released an explosive set of internal SEC documents, obtained through the Freedom of Information Act, revealing that the New York Attorney General had asked the agency to officially declare that Ethereum (ETH) was a financial security, not a commodity, during its lawsuit against KuCoin in 2023.
New York wanted New York to classify ETH as a security
In a letter unveiled among the SEC’s internal exchanges, Shamiso Maswoswe, Director of New York’s Investor Protection Bureau, requested direct intervention from the federal regulator. She requested an “amicus brief” to publicly support the idea that ETH was a security. She even mentioned that this classification was not essential for the procedure, as the State regulates both securities and commodities, but it would be ‘beneficial for investor protection.’
The SEC ultimately did not comply with this request, preferring to maintain an ambiguous stance. Historically, the agency had admitted that ETH more closely resembled a commodity, but its shift to proof of stake in 2022 raised doubts. The agency then remained silent, leaving regulatory uncertainty lingering.
A political attempt that fell by the wayside
We would like to ask the SEC to file an amicus in support of the argument that Ether is a security.
This revelation adds to a series of documents that Coinbase has been publishing for several months as part of its legal battles with US authorities. In previous waves, the platform had uncovered letters from the FDIC, confirming that banking regulators behind the scenes discouraged institutions from interacting with the crypto industry.
The current dossier also includes internal SEC exchanges on Ripple, XRP, and the issue of its centralization. These communications date back to 2021, well before the trial that recently turned in favor of Ripple, with the company even recovering funds paid to the agency as part of a fine.
Coinbase opens the floodgates of transparency
This battle over the definition of digital assets, security or commodity, is at the heart of the conflict between the crypto industry and US regulators. A conflict that has slightly eased since Donald Trump’s arrival at the White House. The new president has shown a much more crypto-friendly stance, especially by appointing Paul Atkins to lead the SEC. Under his direction, the agency has sent signals indicating that some token categories would now be outside its scope.
A deep-seated struggle despite political calm
This battle for the classification of digital assets, security or commodity, is at the core of the conflict between the crypto industry and US regulators. A dispute that has slightly calmed since Donald Trump came to the White House. The new president has shown a much more favorable stance towards crypto, especially by appointing Paul Atkins as the head of the SEC. Under his leadership, the agency has multiplied signals suggesting that certain token categories would now be outside its scope.
As for New York, this did not prevent them from winning the case against KuCoin. In December 2023, the platform agreed to settle for 22 million dollars to avoid a trial and withdrew from the New York market. A clear message from Attorney General Letitia James: ‘We will continue to act against any company that flaunts the law and jeopardizes the savings of New Yorkers.‘
