SEC Seeks to Classify Ethereum as a Security, Endangering Approval of Ethereum Spot ETFs by Giants Like BlackRock
The US Securities and Exchange Commission (SEC) is actively pushing to classify Ethereum as a security, putting the approval of Ethereum Spot ETFs by giants like BlackRock at risk.
According to Fortune, the SEC’s legal offensive aims to classify Ethereum as a security.
US companies that have been subpoenaed as part of this investigation have revealed this strategy, which could deal a blow to the crypto industry’s aspirations. Hopes for the SEC to approve Ethereum Spot ETF requests, particularly from BlackRock, Grayscale, and Fidelity, now seem to be fading, despite the recent approval of Bitcoin Spot ETFs in January.
Ethereum Under Regulatory Pressure
This SEC offensive comes at a particularly difficult time for Ethereum, marked by a significant drop in the price of ETH. Earlier in the day, CoinAcademy revealed that the Ethereum Foundation is under investigation.
The start of the SEC’s investigation into the Ethereum Foundation, based in Switzerland, coincides with the blockchain’s transition to a new governance model, the ‘proof-of-stake,’ in September 2022. This transition had been closely observed by market players, both for its technological and regulatory implications.
Expected Repercussions
The SEC’s request for documents relating to any interaction with the Ethereum Foundation shows the agency’s intent to directly address the case of ETH, considering it as a security. This investigation could have repercussions not only on the classification of Ethereum but also on the entire cryptocurrency industry, which is already facing increasing regulation.
