[NEWS] SEC investigates Ethereum, could it be classified as a security?

It has been revealed that the SEC (Securities and Exchange Commission) is investigating Ethereum (ETH) and has issued subpoenas to companies related to the Ethereum Foundation. On the 20th, Fortune reported, citing people familiar with the matter.

According to people related to companies that received subpoenas from the SEC, the inquiries were about the Ethereum Foundation. Some companies received subpoenas recently, while others received them immediately after Ethereum switched its consensus algorithm to PoS (Proof of Stake) in its major upgrade "The Merge" in September 2022.

According to Fortune's report, the SEC has asked companies to submit documents and financial records related to their interactions with the Ethereum Foundation.

This move by the SEC is widely seen as part of a determination of whether Ethereum is a security. According to Fortune, the SEC is trying to classify Ethereum as a security through this investigation.

Will the realization of an Ethereum spot ETF become more distant?

If Ethereum is considered a security, the early approval of the currently applied for Ethereum spot ETF may be delayed.

The SEC has previously postponed the decision to approve an Ethereum spot ETF. On the 20th, it just postponed the approval decision for Vaneck until May 23rd.

Regarding the Ethereum spot ETF, there was initially a strong optimistic view that it would likely be approved within May. Analysts once thought the probability of approval was over 70%, but recently it has dropped to around 30%.

SEC Chairman Gary Gensler previously claimed that "all cryptocurrencies that use PoS can be considered securities." Since then, many cryptocurrencies have been determined to be securities, but no clear statement has been made about Ethereum.

If Ethereum is deemed a security by this investigation, many exchanges may be forced to review their services. At the same time, it is inevitable that the currently applied for Ethereum spot ETF will also be reviewed, so approval within May is expected to become more difficult.

Reference: Press
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