SEC has considered Ethereum a security for extended period

The
U.S.
SEC
and
its
Chairman,
Gary
Gensler,
have
considered
Ethereum
a
security
for
at
least
a
year.

According
to

FOX
Business,
Consensys,
which
develops
Ethereum
software,
filed
an
unredacted
complaint
against
the
agency
after
this
was
revealed.

The
document
states
that
the Ethereum
2.0 investigation was
based on
the SEC’s belief
that
possible
offers
and
sales
of certain securities, including
but
not
limited
to
ETH,
had
occurred
since
at
least
2018.

The
Consensys lawsuit
shows
that
the
SEC
has
made
multiple
document
requests
over
the
past
year
asking
for
more
details
about
the company’s role
in
the
proof-of-stake
(PoS)
update
and its
acquisitions,
holdings,
and
sales
of
Ethereum. Documents
also
show
that
the
SEC
may
believe
that
sales
of
Ethereum
even
before
the
2018
merger
were
securities.

The

SEC’s
belief
that
Ethereum
is
a
security
contradicts
the
previous
guidance
under
the
chairmanship
of Jay
Clayton.
Additionally,
in
June
of
2018,
then-CFO
Bill
Hinman
stated
in
a
speech
the SEC’s position
that
Ethereum,
along
with

Bitcoin,
is
not
a
security.

Even
before
Gensler’s
testimony, the
chairman’s reluctance
to
give
a
definitive
answer
on Ethereum’s regulatory
status
raised
alarm
bells
for
the
crypto
industry.
Many
speculate
that Ethereum’s Merge
has
made
the
cryptocurrency
more
security-like
than
the
original
consensus
mechanism.

Consensys

initiated
legal
action
against
the
SEC to
keep
the
regulator
from
overseeing
the
Ethereum
blockchain.

Consensys
said
its
action
against
the
SEC
followed
the
April
10 Wells
notice
indicating
the
regulator
was
preparing
to
take
enforcement
action
against
the
company
regarding
its
MetaMask
wallet
services.
The
company
emphasized
that

MetaMask
is
not
a
broker
and “does
not
store clients’ digital
assets
or
perform
any
transactional
functions.”