Consensys, the developer of Ethereum software, filed an unredacted complaint against the agency after this revelation, as reported by FOX Business.
The document indicates that the Ethereum 2.0 inquiry stemmed from the SEC’s suspicion that potential offerings and transactions involving certain securities, such as ETH, had taken place since at least 2018.
The lawsuit filed by ConsenSys reveals that over the past year, the SEC has issued several document requests seeking further information regarding the company’s involvement in the proof-of-stake (PoS) update, as well as its acquisitions, holdings, and Ethereum sales. Additionally, the documents suggest that the SEC may consider Ethereum sales predating the 2018 merger as securities.
The SEC’s assertion that Ethereum is a security contradicts previous guidance during Jay Clayton’s chairmanship. Furthermore, in June 2018, then-CFO Bill Hinman declared in a speech the SEC’s stance that Ethereum, alongside Bitcoin, is not classified as a security.
Prior to Gensler’s testimony, the chairman’s hesitance to provide a clear stance on Ethereum’s regulatory classification sparked concern within the crypto industry. There’s widespread speculation that Ethereum’s Merge has rendered the cryptocurrency more akin to a security compared to its original consensus mechanism.
Consensys initiated legal proceedings against the SEC in an attempt to prevent the regulator from exercising oversight over the Ethereum blockchain.
Consensys stated that its response to the SEC ensued after receiving the April 10 Wells notice, signaling the regulator’s intent to pursue enforcement action concerning its MetaMask wallet services. The company underscored that MetaMask operates as a non-broker entity, explicitly stating that it “does not retain clients’ digital assets or engage in transactional activities.“
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