The US Securities and Exchange Commission (SEC) has been investigating Ethereum since 2023, according to new court filings. Chairman Gary Gensler and the agency have been looking into the cryptocurrency for a year, seeking to challenge its security status.
Ethereum software firm Consensys recently filed a lawsuit against the SEC, shedding light on how the agency views the cryptocurrency. It has been building a case against Ethereum since early 2023, which is crucial as the agency faces numerous Spot Ethereum ETF applications.
The SEC’s investigation order, approved by the Director of the Division of Enforcement Gurbir Grewal in March of last year, allows the agency to investigate both the buying and selling of Ethereum. This formal order permits the SEC to issue subpoenas and gather witness testimony under oath.
The revelation explains why Gensler avoided answering whether Ethereum is a commodity or security during a recent Congressional testimony. Consensys claims that Gensler did not want to acknowledge that the SEC had already solidified its power through the investigation order.
While the SEC has labeled specific digital assets as securities in lawsuits against cryptocurrency exchanges, Ethereum was not among the assets named in lawsuits against Coinbase and Binance in 2023. The regulatory landscape for digital assets in the United States has been uncertain, and investors have faced challenges due to the agency’s enforcement-first approach to regulation.