The Ethereum Foundation, a Swiss-based nonprofit that undergirds the second-largest digital asset valued at a $426 billion market cap, says it is facing scrutiny from an anonymous regulator. “This commit removes a section of the footer as we have received a voluntary enquiry from a state authority that included a requirement for confidentiality,” reads an update on the foundation’s GitHub page. Fortune has reported that the enquiry is part of a probe from the U.S. Securities and Exchange Commission (SEC) as the regulator is “waging an energetic legal campaign to classify Ethereum … as a security.” If the SEC successfully classies ether, the underlying asset on the Ethereum network, as a security and can subsequently apply onerous regulations, analysts fear the crypto market in the U.S. will suffer. “If the SEC labels ethereum as a security, that would pretty much nuke the cryptocurrency market in the United States,” said Aaron Arnold in the video above. “Because that would mean everything is a security except bitcoin.” When assets are determined to be securities, issuers and exchanges must obtain licenses and comply with other regulations that can be expensive and difficult to satisfy. With the approval of numerous spot bitcoin exchange-traded funds (ETFs) earlier this year, the SEC seemed to implicitly accept that bitcoin will be classified as a commodity by the current administration. But as several firms seek approval to offer spot ETFs based on ethereum, this latest probe suggests denials are forthcoming. The SEC did, however, approve ethereum futures ETFs even after the protocol was changed to a proof-of-stake consensus mechanism.
Full report : Ethereum Foundation Gets SEC Scrutiny in Latest Crypto Crackdown.
