According to a report by Fortune magazine, the US Securities and Exchange Commission (SEC) is currently investigating US cryptocurrency companies. Based on the statements of US companies that have received subpoenas related to the investigation, the SEC is actively pursuing legal action to classify Ether as a security. This news further dampens the industry’s hopes that the regulatory agency will approve applications for Ethereum spot ETFs from companies like BlackRock.
The report indicates that the SEC began investigating the Ethereum Foundation around September 2022, shortly after the Ethereum network transitioned to the Proof-of-Stake consensus mechanism (PoS). In addition, sources have pointed out that the Ethereum Foundation has received subpoenas in recent weeks, which may explain the reason for the previous removal of the Canary image by the Ethereum Foundation (although the claim of receiving subpoenas seems to contradict the Foundation’s assertion of “voluntariness”).
Although the release of this news led to a decline in the price of ETH, many industry professionals believe that while it may not be good news, it is not necessarily a terrible bearish signal either. Moreover, the SEC’s determination that Ether is a security does not seem to be a novel development. The market also appears to have recognized this, as the price of ETH has stopped falling and is currently rebounding.
