Last week blockchain firm Consensys filed a redacted lawsuit against the Securities and Exchange Commission (SEC), arguing that the SEC is unlawfully claiming that Ethereum’s Ether token is a security. Yesterday the unredacted version was published, revealing that most of the excluded words related to the SEC’s Formal Order of Investigation in the matter of “Ethereum 2.0”. The timeline is highly relevant.
According to the legal filing, Consensys alleges that the SEC approved the Order on April 13, 2023 stipulating that Ether was a security, six days before SEC Chair Gary Gensler gave Congressional testimony. The SEC Chair failed to directly answer very specific questions on the topic.
As context, in 2018 SEC Director William Hinman made a statement in which he declared that Ether was not a security. By making the statement, Mr Hinman classified Ether differently from other cryptocurrencies. One may or may not expect the SEC to take a clear position on other tokens. However, if it has changed its position on a specific previous statement, then avoiding clarity on the matter seems unacceptable.
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