For an extended period, the U.S. Securities and Exchange Commission (SEC), led by Chairman Gary Gensler, has maintained the position that Ethereum qualifies as a security, according to recent reports from FOX Business.
This revelation prompted Consensys, a developer of Ethereum software, to file an unredacted complaint against the SEC.
The complaint highlights the SEC’s ongoing investigation into Ethereum 2.0, which stems from the agency’s belief that certain securities, including Ethereum (ETH), may have been offered and sold since at least 2018.
Documents from the lawsuit reveal that over the past year, the SEC has issued multiple document requests to Consensys, seeking further information regarding the company’s involvement in the proof-of-stake (PoS) update, as well as its acquisitions, holdings, and sales of Ethereum.
Additionally, the SEC appears to suggest that Ethereum sales predating the 2018 merger may also be classified as securities.
This recent development contradicts previous guidance from the SEC during the tenure of former Chairman Jay Clayton.
In a speech in June 2018, then-CFO Bill Hinman explicitly stated that the SEC did not consider Ethereum, along with Bitcoin, to be securities.
Chairman Gensler’s ambiguity regarding Ethereum’s regulatory status, particularly in light of the Ethereum Merge, which has potentially altered the cryptocurrency’s security-like attributes compared to its original consensus mechanism, has unsettled the crypto industry.
Concerns have been raised about the implications of the SEC’s stance on Ethereum’s future development.
In response to the SEC’s actions, Consensys has taken legal action to prevent the regulator from exerting oversight over the Ethereum blockchain.
This move follows a Wells notice received by Consensys on April 10, indicating that the SEC was preparing to take enforcement action against the company regarding its MetaMask wallet services.
Consensys stated that MetaMask does not function as a broker and does not store clients’ digital assets or execute transactions on their behalf.
