- Speculation suggests that the SEC may be behind the investigation, considering classifying Ethereum as a security.
- The shift of Ethereum to a Proof of Stake mechanism and the introduction of staking services have captured the regulatory attention of the SEC.
The Ethereum Foundation faces an investigation by an undisclosed state authority. This development was made public via GitHub on February 26, revealing that the foundation had been the subject of subpoenas related to an investigation.
Speculation is emerging that the SEC may be behind this inquiry, with intentions to list Ethereum as a financial security .
This comes at a time when several Ethereum exchange-traded fund (ETF) applications are under review, which could complicate or even halt the approval of these financial instruments.
The inquiry, according to ETHNews reports, began in September 2022, coinciding with Ethereum’s transition from a Proof-of-Work to Proof-of-Participation system .
This modification to its protocol has drawn attention to staking services, a focal point for the SEC and its argument for potentially classifying Ether as a financial security.
Exciting times are ahead! Our institutional custody service for ETH is just around the corner. Institutions are invited to sign up in anticipation of our upcoming launch at https://t.co/c6VNTsmfoL. Keep an eye out for more details!
— Prometheum (@PrometheumInc) February 23, 2024
There’s speculation that the SEC might be leveraging Prometheum’s initiative as a pivotal case to definitively categorize Ethereum as a regulated security.
As the May deadline for the SEC’s response to these submissions looms, market experts are bracing for potential denials, citing the noticeable absence of communication between the SEC and the submitting parties.
