Menu

Categories:

Hot right now:

Follow on:

Coinsurges provides coverage of fintech, blockchain, and Bitcoin, delivering the most recent news and analyses on the future of money. Stay up-to-date with live prices, charts, and trading options for the top exchanges. Keep track of the day's top cryptocurrency gainers and losers, as well as which coins have experienced gains and losses in the past 24 hours.
Trust Coinsurges as your go-to source for all news and updates in the industry.

Menu

Categories:

Hot right now:

Follow on:

Coinsurges provides coverage of fintech, blockchain, and Bitcoin, delivering the most recent news and analyses on the future of money. Stay up-to-date with live prices, charts, and trading options for the top exchanges. Keep track of the day's top cryptocurrency gainers and losers, as well as which coins have experienced gains and losses in the past 24 hours.
Trust Coinsurges as your go-to source for all news and updates in the industry.

Ethereum Regulatory Saga: Court Filings Expose SEC Chair Gensler’s Stand

Share This Post

Newly disclosed court filings have shed light on the belief of the US Securities and Exchange Commission (SEC) and its chairman, Gary Gensler, that Ethereum (ETH) is an “unregistered security” under the Howey Test, which is considered by the vast majority of crypto advocates to be an outdated legal framework for regulating crypto assets.  

According to a recent Fox Business report, the details emerged following Ethereum software company ConsenSys’s filing of an unredacted complaint against the SEC.

Is Ethereum An ‘Unregistered Security’?

According to the court filings, SEC Chair Gensler and the agency seem to have held the belief for at least a year that Ethereum was operating as an unregistered security, thereby violating federal regulations. 

The SEC’s Division of Enforcement, led by Gurbir Grewal, initiated a formal order of investigation into Ethereum’s status as a security on March 28, 2023. This investigation, known as “Ethereum 2.0,” involved the enforcement staff probing individuals and entities buying and selling ETH tokens.

If the SEC were to classify Ethereum as a security, it would contradict previous guidance provided under former SEC Chairman Jay Clayton. In June of the preceding year, then-Director of Corporation Finance Bill Hinman stated that Ethereum and Bitcoin (BTC) were not considered a security. This announcement led to a 10% increase in ETH’s price. 

Moreover, the Commodity Futures Trading Commission (CFTC) classified ETH, the native token of the Ethereum network, as a commodity falling under its jurisdiction. 

Proof-Of-Stake Mechanism At Center Of Regulatory Debate

According to the report, the SEC’s investigation into Ethereum was conducted with “unusual secrecy,” with subpoena recipients required to sign confidentiality agreements. 

The motive behind this secrecy remains unclear, but the implications for the crypto market could be substantial if Ethereum, with its market cap of nearly $400 billion, is deemed a security.

Even before his testimony, Chairman Gensler’s reluctance to provide a definitive answer on Ethereum’s regulatory status raised concerns within the crypto industry. 

Some speculated that Ethereum’s transition to a “proof-of-stake” consensus mechanism in September 2022, where validators stake their Ethereum holdings, made it resemble a security more than the original “proof-of-work” mechanism used by Bitcoin. Gensler alluded to this notion, suggesting proof-of-stake tokens could trigger the Howey Test.

ConsenSys Takes On SEC

As Bitcoinist reported, software company ConsenSys filed a lawsuit against the SEC, accusing the agency of an “unlawful” power grab in attempting to classify ETH as a security. 

ConsenSys’ lawsuit against the SEC provides further insights into the ongoing investigation. Over the past year, the SEC has made multiple document requests, seeking detailed information about ConsenSys’ role in the transition to proof-of-stake and its acquisitions, holdings, and sales of ETH. 

Fox Business’s report further suggests that the SEC may also consider sales of ETH before The Merge, dating back to 2018, as potential securities. 

The investigation has intensified in recent weeks, with ConsenSys receiving additional document subpoenas and a Wells notice indicating the SEC’s intent to take enforcement action against the firm for allegedly acting as an unregistered broker-dealer offering unregistered securities, including ETH, through its MetaMask wallet.

Ethereum

ETH is trading at $3,170, down more than 4% in the last 24 hours alone, after several failed attempts to consolidate above the $3,200 price level. 

Featured image from Shutterstock, chart from TradingView.com

Read Entire Article
spot_img
- Advertisement -spot_img

Related Posts

SUI Short-Term Spark Fades: Rejection At $3.95 Triggers 6% Slide

SUI is attempting to regain traction, currently trading at $36292 with a modest 134% uptick on the 4-hour chart noted by Crypto Man MAB in a recent X post After reaching a 24-hour high of $39599, the

Weekly Crypto Wrap: Bitcoin’s Surge Stalls Amid Trump Tariff News; Analyst Predicts $140,000 by July

Bitcoin ended the week 5% higher after US President Donald Trump’s tariff threat against the European Union caused market volatility EU Tariff Threat Rattles Markets After kicking off what turned

Bitcoin Sets New Highs But Altcoins Struggle 30% Below ATH – Details

Bitcoin is thriving once again, defying global macroeconomic turbulence and pushing into uncharted territory Earlier this week, the world’s largest cryptocurrency hit a new all-time high of

Market Expert Projects ‘Undervalued’ Litecoin To Soar At Least 1,000% —  Here’s How

The price of Litecoin has been somewhat indecisive this year, and the past week is a prime example of this disappointing trend While the world’s largest cryptocurrency, Bitcoin, reached a new

Blackrock’s IBIT and ETHA Lead Friday’s Crypto ETF Inflows

Spot bitcoin and ethereum exchange-traded funds saw a combined $27037 million in inflows on Friday, continuing a trend of institutional engagement with these crypto-backed funds Spot Bitcoin ETFs Now

The Stars Align: Crypto Analyst Predicts 1,700% Rally For XRP In 2 Months

A crypto analyst has predicted that the XRP price could increase by a staggering 1,700% over the next two months If accurate, this explosive move could catapult the altcoin well above its current