The US Securities and Exchange Commission (SEC) is reportedly pursuing a legal campaign to classify Ethereum as a security. Indeed, Fortune reports a plethora of US companies were subpoenaed related to an ongoing investigation into ETH.
The development further threatens the industry-wide hope of the SEC to approve a Spot Ethereum ETF this year. The agency had issued approval for 11 Spot Bitcoin ETFs in January, but the current legal action appears to undermine Ethereum’s chances.
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SEC Seeking Security Classification for Ethereum
Since the start of 2024, the digital asset market has performed impressively well. Although this week has seen the price correct, Bitcoin has led gains across the board. The asset itself reached a new all-time high of $73,000 this month through increased institutional investment.
Although many had hoped ETH would benefit from similar action, that appears unlikely to happen now. According to a report from Fortune, the SEC is pursuing a legal campaign to classify Ethereum as a Security. Specifically, the agency has issued subpoenas to US companies as they investigate the asset.
Also Read: Ethereum Foundation is Under Investigation by State Authority
According to the report, the SEC is seeking “documents and financial records that they may have regarding their dealings with the Etheruem Foundation,” a non-profit group that supports Etheruem and is based in Switzerland. Moreover, the report notes investigations into the Ethereum Foundation began as far back as September of 2022 when it transitioned to a proof-of-stake governance model.
The report noted another source received a subpoena within the last several weeks. The initial investigation was reported by CoinDesk but has not received confirmation from the Ethereum Foundation. In a comment to Fortune, the SEC said it “does not comment on the existence or nonexistence of possible investigation.”