New Court Documents Reveal SEC and Gary Gensler’s Belief that Ether Was Considered a Security for at Least a Year
According to recent findings, the United States Securities and Exchange Commission (SEC) and its Chair Gary Gensler held the belief that Ether (ETH) was a security for a year-long period. The information was revealed in a complaint filed by Consensys Software Inc. It states that the SEC Director of Enforcement Gurbir Grewal initiated an investigation into “Ethereum 2.0” on March 28, 2023. The investigation focused on potential offers and sales of certain securities, including ETH, without proper registration or exemptions.
This revelation contradicts the SEC’s previous approval of ETH Future ETFs in October 2023. Gensler, who has been silent on the classification of ETH, has faced criticism for the agency’s regulatory approach.
In June 2028, the SEC’s then-Director of Corporation Finance, Bill Hinman, gave a speech claiming that ETH was not a security. However, the recent filing indicates that the SEC is investigating Consensys’ current ETH sales as potential securities transactions.
Prior to these court filings, Consensys filed a lawsuit against the SEC for attempting to regulate ETH as a security. In a blog post, Consensys founder Joe Lubin argued against the expansion of the SEC’s jurisdiction and criticized their “reckless approach.”
In recent weeks, various companies associated with the Ethereum Foundation have been subpoenaed for information. Additionally, the foundation received contact from an unnamed state authority in March. Consensys received a Wells notice on April 10, suggesting that the SEC may take legal action against them in the near future.