Breaking Down the Ethereum Investigation: A Crypto Lawyers Perspective

Key Points:

The Ethereum investigation is common for crypto protocol foundations to face regulator queries, says crypto lawyer Mike Selig.

The Ethereum Foundation, a Swiss non-profit central to the Ethereum ecosystem, is under investigation by an unnamed “state authority,” according to information from their GitHub repository.

The focus and scope of the investigation are currently unknown, but the Foundation has confirmed that it received a confidential enquiry from a state authority.

Earlier this month, Ethereum underwent a significant technical upgrade, known as Dencun, aimed at reducing transaction costs for users of Ethereum-based layer-2 platforms.

Ethereum Foundation Under State Authority Investigation

Previously, the Ethereum Foundations website had a disclosure stating that it had never been contacted by any agency requiring non-disclosure. However, this disclosure was removed in a recent GitHub commit.

An attorney familiar with the matter suggests that a Swiss regulator might have issued a document request to the Ethereum Foundation and could be collaborating with the U.S. Securities and Exchange Commission (SEC).

Other overseas entities are reportedly also receiving scrutiny. The SEC is evaluating multiple applications for an Ether ETF, though analysts are becoming less optimistic about approval due to perceived lack of engagement between applicants and SEC officials.

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Crypto Lawyers Opinion on The Ethereum Investigation

According to Mike Selig, a lawyer specializing in crypto and financial regulation, its extremely common for crypto protocol foundations to receive voluntary requests for information from federal and state regulators.

And subpoenas are about as sure as the sunrise for a crypto entity.

Mike Selig said

In general, the incident, which occurred over two months ago, is likely not severe. It might be related to registration activities or legal paperwork. The SEC might also have reached out to discuss the Ether Spot ETF.