07/05/2023
401 CommentsSEC Approves Official Investigation Order into 'Ethereum 2.0' from 2023, Suspected ETH is a Security Since 2018
The U.S. Securities and Exchange Commission (SEC) began investigating Ethereum’s securities status last year, according to an April 29 court filing by Consensys. The filing reveals that Gurbir Grewal, Director of the Division of Enforcement, approved a Formal Investigative Order related to 'Ethereum 2.0' in March 2023. This Formal Order gives SEC staff broader authority to investigate and subpoena individuals and entities involved in ETH transactions. “The formal order confirms this authorization based on information from the SEC indicating that offers and sales may have occurred, since at least 2018, of ‘certain securities, including but not limited to ETH, for which no registration statement has been or is in effect . . . and for which no exemption applies.’” The SEC then issued subpoenas to multiple individuals and organizations investing in Ethereum, including Consensys
Notably, this revelation comes days after Consensys filed legal action against the SEC on April 25. The company argued that the SEC’s attempt to classify Ethereum as a security represents a regulatory violation, warning of its potential to stifle innovation and negatively impact developers, investors, and institutions using Ethereum’s decentralized infrastructure. Ethereum's regulatory status has been a persistent issue for the SEC in recent years. In 2018, Gensler stated in a lecture at the Massachusetts Institute of Technology that ETH is not considered a security. However, Gensler’s stance seems to have changed, especially after ETH transitioned to PoS. Despite this, he still refused to address the status of ETH definitively, despite numerous questions from stakeholders, including members of Congress.
