Analysis of recent events in Ethereum: Will ETH be identified as a security?

Will ETH be identified as a security?

Fox Business recently reported that according to court documents filed by Ethereum software giant Consensys, SEC Chairman Gary Gensler began trying to treat Ethereum as an unregistered security that does not comply with current federal regulations at least a year ago. Consensys is challenging the SEC's attempt to re-identify Ethereum as a security through litigation.

According to the content of the document, on March 28, 2023, Gurbir Grewal, head of the SEC's enforcement department, approved a formal investigation order for "ETH", authorizing SEC staff to investigate and subpoena personnel from various project parties involved in ETH transactions.

The FOX report pointed out that the SEC is determined to keep the investigation confidential, and sources who received the subpoena said they were forced to sign a confidentiality agreement. As one of the companies that received the SEC subpoena, Consensys filed a lawsuit against the SEC last week. The company revealed that it also received a "Wells Notice" from the SEC earlier this month, which may be a potential enforcement action involving its MetaMask Swaps and staking services.

(Note: "Wells Notice" refers to the informal reminder issued by the SEC before civil litigation against listed companies in the United States. Listed companies that receive the notice can communicate and negotiate with the SEC before receiving formal litigation.)

Historically, SEC Chairman Gensler has not given a clear position on whether ETH is a security. In April 2023, when Congressman Patrick McHenry asked him whether ETH was a security at a congressional hearing, Gensler refused to answer the question in an attempt to cover up the SEC's initial determination that ETH was a security.

My cousin believes that Ethereum will not be identified as a security because the Hong Kong Ethereum ETF has been passed, and the Americans will follow suit, so we don't need to pay too much attention to this aspect.

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