SEC has regarded Ethereum as security for at least a year: report

SEC began investigtions into Ethereum as a security in March 2023.
The regulator sent subpoenas and a Wells Notice to Consensys, a Ethereum development firm.

The US Securities and Exchange Commission (SEC) has reportedly viewed Ethereum as an unregistered security for at least a year, FOX Business reported on Monday.

According to the publication, this consideration about ETH comes to light following court filings by Ethereum software developer company Consensys.

The company, which sued the SEC last week amid investigations around the cryptocurrency, maintains that Ethereum is not a security.

Consensys sued the SEC

The Consensys team’s lawsuit filed in Texas accused the Gary Gensler led SEC of “overreach” in its regulation of the crypto space. The lawsuit also asked the court to declare ETH not a security.

SEC’s Wells Notice to Consensys and an investigation against the Ethereum Foundation have been key events to unfold in the past few weeks.

FOX Business’ report states that documents show the SEC’s Enforcement Division has looked at Ethereum as an unregistered security since March last year. Per the documents, the investigation centers on the so-called “Ethereum 2.0.”

The SEC believes that there might have been securities “offers and sales” involving Ethereum since 2018.

Interestingly, this is the same year that SEC’s then-Director of Corporation Finance Bill Hinman said Ethereum was a security. Former SEC Chair Jay Clayton also gave guidance to that effect, while the Commodity Futures Trading Commission has deemed ETH to be a commodity.

But per the new court documents, SEC’s Division of Enforcement head Gurbir Grewal gave the nod to a formal investigation into Ethereum’s status on March 28, 2023.

The order authorised enforcement staff to probe and issue subpoenas to entities and individuals deemed to have been involved in the buying and selling of ETH.

These investigations have formed one part of the hurdle market experts say could see the SEC deny spot Ethereum ETFs in May.