Ethereum Foundation subpoena casts shadow over potential ETH ETFs

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Written on Mar 21, 2024

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A state authority has summoned the Ether Foundation for the first time.
Reports suggest the SEC is working to classify ETH as a security.
The developments will likely impact the expected Ether ETF approval in May.

While the crypto market recovers following Wednesday’s FOMC conference, Ethereum (ETH) enthusiasts contemplate new updates that “a state authority” has subpoenaed the Ether Foundation for the first time.

JUST IN:

The Ethereum Foundation receives its first subpoena, potentially impacting ETF approvals and market performance. Traders could de-risk and consider Bitcoin or Solana. #Ethereum #ETFs #CryptoSlate
— Sharpe Signals (@SharpeSignals) March 20, 2024

Regulator summoning the Ethereum Foundation

GitHub commits on the Foundation’s repository indicate that a state authority sent a voluntary confidentiality (or gag order) inquiry.

Individuals familiar with the issue confirmed that the regulator demanded details of entities working with the Foundation as it reviews Ether as among the cryptocurrencies violating securities law.

Generally, these requirements come from the Federal Bureau of Exchange, the Internal Revenue Services, and the United States Securities and Exchange Commission.

Meanwhile, the Swiss-based entity no longer has the Warrant Canary on its website, confirming the authority’s subpoena.

The crackdown’s details remain unknown, but the ETH Foundation obeys the regulator by submitting private data.

Ethereum ETF hopes dimmed

The latest subpoena comes as the market anticipates an Ether exchange-traded fund, scheduled for 23 May 2024, after several delays.

Experts trust the regulatory clampdown will further postpone the approval, and the absence of communication between issuers and US SEC suggest possible rejection.

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ETHEREUM FOUNDATION SUBPOENAED FOR THE FIRST TIME IN ITS HISTORY; ETF REJECTION INEVITABLE?

NFA; read below for my analysis and opinion

The Facts
– The foundation has removed the Warrant Canary from its website, indicating in a Github repository that they have been… pic.twitter.com/gVUQ8j1GKL
— huss ???? ???? (@Husslin_) March 20, 2024

Ethereum price movements

The altcoin gained 9% over the past day to hover at $3,509 at press time. While higher charts reflect bearishness, lower timeframes display recoveries after the FOMC indicated rate cuts in 2024.

Nonetheless, labeling ETH as security will impact the broad market since most digital developers rely on the Ethereum blockchain. Nevertheless, increasing attention from leading firms brings hope to the community.

BlackRock’s has introduced a tokenized fund on the Ethereum network, highlighting optimism on the asset’s long-term potential.