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.”
