SEC and Gensler Viewed Ether as a Security for Over a Year

Crypto News- New insights emerge from Consensys’ lawsuit against the SEC, shedding light on the regulatory body’s stance on Ether (ETH). As detailed in court filings unveiled today, SEC Chairman Gary Gensler and the agency purportedly maintained the view that Ether constituted an unregistered security for a significant duration. Fox Business producer Eleanor Terret, citing these documents, highlights the SEC’s position, suggesting it remained unchanged for at least a year, branding Ether as a non-compliant asset under federal regulations.

SEC and Gensler Viewed Ether as a Security for Over a Year

The revelations come amidst escalating tensions between Consensys and the SEC, with the former facing legal action for alleged violations of securities laws. The unredacted complaint, filed by Consensys on April 25 in a Texas federal court, discloses critical information regarding the SEC’s investigative actions. Notably, on March 28, 2023, the SEC’s Division of Enforcement initiated a formal investigation, dubbed “Ethereum 2.0,” probing Ether’s security status. This move empowered enforcement authorities to issue subpoenas and delve into transactions involving the cryptocurrency.

Confidential sources intimate that recipients of these subpoenas were urged to maintain strict confidentiality, hinting at the sensitivity surrounding the investigation. Allegedly, the SEC’s scrutiny is rooted in suspicions of illicit offerings and sales of Ether dating back to 2018.

Ether’s Security Status: Gensler’s Shift Challenges Previous SEC Guidance

The potential reclassification of Ether as a security by the Gensler-led SEC stands in stark contrast to previous guidance provided during Jay Clayton’s tenure. Bill Hinman’s 2018 proclamation, asserting Ether’s non-security status, now faces potential contradiction, raising uncertainty within the crypto community.

The latest disclosures further unveil the Commission’s unanimous approval of the “Ethereum 2.0” probe on April 13, 2023, shortly preceding Gensler’s evasive testimony before the House Financial Services Committee. Gensler’s refusal to clarify the SEC’s position on Ether during this appearance has sparked speculation and apprehension within the markets.

SEC’s Ether ETF Decision Delayed Amid Gensler’s Uncertain Stance

These developments coincide with speculations surrounding the SEC’s impending decision on a spot Ether exchange-traded fund (ETF). Analysts anticipate a possible delay, citing Gensler’s opaque stance on Ether’s security status as a pivotal factor in the decision-making process.

In light of these unfolding events, the regulatory fate of Ether hangs in the balance, with implications reverberating across the cryptocurrency landscape and traditional financial markets alike.