Ethereum Facing SEC Lawsuit? US SEC Pushes for ETH Securities Classification

As the crypto market's attention turns from bitcoin to Ethereum, there's been a lot of news hitting the market. A Feb. 26 report from a Swiss-based nonprofit that the Ethereum Foundation is under investigation by a national agency has the crypto market in a tizzy. It is not known where the country is or what is being investigated. At press time, the Ethereum Foundation had not responded to requests for comment.

The U.S. Securities and Exchange Commission (SEC) is pushing to have ETH classified as a security, Fortune Crypto reported, citing U.S. companies that have received investigative subpoenas. The SEC has reportedly requested financial data from the organization, among other things. The SEC's investigation began in September 2022, shortly after Ethereum's consensus algorithm switched to proof of stake (PoS), according to one of the people who received the subpoena. Meanwhile, James Seyffart, an analyst specializing in ETFs at Bloomberg, said: "It is unlikely that the SEC will decide that ETH is a security and sue. I think the SEC has tacitly accepted for years that ETH is not a security," he said, echoing the same sentiment about Ethereum.