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The US Securities and Exchange Commission (SEC) has launched a probe into Ethereum to determine whether the largest altcoin is a security, Fortune reported.
The SEC sent subpoenas to companies seeking documents and financial records relating to their dealings with the Ethereum Foundation, the story said, citing companies that have received SEC subpoenas.
The Ethereum Foundation, a non-profit organization that oversees the governance and development of the Ethereum blockchain, confirmed it was under investigation in an update on its GitHub repository.
The investigation started after the Ethereum blockchain switched from a proof-of-work consensus to proof-of-stake in 2022, Fortune said.
Odds For SEC Approval Of A Spot Ethereum ETF Plunge
The SEC probe into Ethereum comes as BlackRock, Fidelity, and six others await the regulator’s decision on their applications for a spot Ethereum ETF (exchange-traded fund).
The SEC approved spot Bitcoin ETFs in January, but US legislators have expressed concern over the approval of additional crypto ETFs.
Bloomberg ETF analyst Eric Balchunas says there is now only a 25% chance the SEC greenlights a spot ETH ETF by a May deadline as he slashed the odds from a 35% possibility on Mar. 11
.@JSeyff has great note out today explaining our 25% odds, i love this timeline comparison chart. Btc spot comments from SEC came 91 days bf final deadline. We curr 65 days away with eth etf deadline. Tick tock.. pic.twitter.com/Bkp4L0zoa8
— Eric Balchunas (@EricBalchunas) March 20, 2024
On March 20, the SEC delayed its decision for the VanEck spot Ethereum ETF, pushing the decision date to May 23.
Coinbase chief legal officer Paul Grewal came to Ether’s defense, arguing that it is is a commodity and that the SEC has no grounds on which to deny the approval of ETH ETFS.
The SEC has no good reason to deny the ETH ETP applications. And we hope they won’t try to invent one by questioning the long established regulatory status of ETH, which the SEC has repeatedly endorsed. That’s not how the law works. And Americans deserve better. 10/10
— paulgrewal.eth (@iampaulgrewal) March 20, 2024
Grewal also posted an earlier video of SEC Chair Gary Gensler testifying before Congress and saying that Ethereum is not a security.
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