April 03, 2024

UNCHAINED: The Real Reason Why the SEC Might Be Going After Ethereum

1 hour 21 minutes

Why might the SEC investigate the Ethereum Foundation, even though the agency has previously affirmed that ETH is a commodity?

Listen to the episode on Apple Podcasts, Spotify, Fountain, Overcast, Podcast Addict, Pocket Casts, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform.

On March 20, Fortune reported that the SEC was investigating the Ethereum Foundation and was looking for legal ways to label ETH as a security.

Sam Enzer, partner at Cahill Gordon & Reindel, and Greg Strong, partner at DLx Law joined Laura to discuss everything about the investigation and its implications.

The guests speculate about the hidden motivations behind the SEC's investigation and discuss the likelihood of the approval of spot Ether ETFs. They also discuss the recent ruling in the SEC vs Coinbase case, where the judge dismissed claims that Coinbase's wallet was acting as an unregistered brokerage, but allowed the rest of the suit to proceed.

Lastly, they touch on the devastating impact on the crypto industry if the SEC were to win a case alleging ETHer is a security and what they are looking out for in the next couple of weeks and months.

Show highlights:

Whether the investigation into the Ethereum Foundation is confirmed and why the SEC would do this

Why Sam Enzer believes that the SEC would be "utterly wrong and ridiculous" in alleging ETH is a security

Whether the number of people working on Ethereum could make the argument that it is decentralized

How would the SEC justify that ETH is a security and whether the Foundation is running Ethereum’s managerial efforts

Whether the SEC is looking for evidence to deny spot ether ETFs

Why SEC chair Gary Gensler has changed his mind on many of his previous stances regarding crypto assets and whether he's acting in good faith

The ongoing battle between the SEC and the CFTC and the need for Congress to regulate the industry

What the possible outcome of this investigation could be, and whether we'll have a court case soon

What the impact would be if ETH were classified a security

Whether Prometheum could launch its platform offering custody of ETH as a security before an SEC designation

Why Sam believes that the spot ETH ETFs will be denied on May 23rd

How the SEC has already made up its mind even before gathering the facts, according to Sam

Whether the recent judgment on Coinbase's case affects the potential case against the EF

Whether Ethereum transactions are security transactions, and the difference between primary and secondary sales

What to expect in terms of regulation and enforcement actions in the short term, given the number of cases at the moment

Thank you to our sponsors! Polkadot

Guests:

Sam Enzer, Partner at Cahill Gordon & Reindel

Previous appearances on Unchained:

How 'a Criminal Choice' Got Sam Bankman-Fried a 25-Year Prison Sentence

Why the SEC’s Case Against Coinbase Is So Significant for Crypto

Why SBF’s Testimony So Far Has Likely Already Doomed Him

Another Bad Week for Sam Bankman-Fried in His Criminal Trial

Why These Lawyers Say It’s Over for SBF-But His Only Hail Mary Is to Testify

SBF Trial: How Sam Bankman-Fried’s Lawyers Might Try and Win His Case

SBF’s Lawyers Could Be Annoying the Judge How Might That Impact the Trial?

Greg Strong, partner at DLx Law

Previous appearance on Unchained: Why These Lawyers Say It's Over for SBF-But His Only Hail Mary Is to Testify

Links

Ethereum Foundation investigation:

Fortune: SEC probing crypto companies in ETHereum investigation as hopes for ETF dim

CoinDesk: Ethereum Foundation Faces Inquiry From a Government; Fortune Says SEC Investigating ETH

Unchained: Ex-CFTC Commissioner Says ETH Can Be Both a Commodity and a Security

Unchained: SEC Investigating Ethereum Foundation Regarding Proof-of-Stake Transition: Report

Ethereum’s security status

Unchained: Ex-CFTC Commissioner Says ETH Can Be Both a Commodity and a Security

Fortune: SEC’s Gensler seen telling hedge funds that Ethereum and Litecoin are ‘not securities’ in 2018 video

CNBC:

SEC Chair Gary Gensler on potential Crypto regulation: It's within the securities laws

SEC Chair Gary Gensler discusses potential crypto regulation and stablecoins

CoinDesk: SEC Chair Gensler Declines to Say if ETHer Is a Security in Contentious Congressional Hearing

Decrypt: Is Ethereum a Security? SEC Chair Gary Gensler Defers on the Question

WSJ: ETHer’s New ‘Staking’ Model Could Draw SEC Attention

Former SEC director William Hinman has stated that he believes Ethereum is not a security

June 2018 speech

Emails that made public during the Ripple case.

Coinbase case

Unchained: Court Rejects Coinbase's Bid to Dismiss SEC Charges Against It

Prometheum

CoinDesk: House Republicans Demand SEC Explain What's Up With Crypto Platform Prometheum

Unchained: Aaron Kaplan Scoffs at Legal Tenets of Crypto, But Gives Few Details About Prometheum

Other SEC/crypto news

The Block: DeFi Education Fund and Texas apparel company Beba take SEC to court over 'regulating by enforcement' stance

Unchained: Gensler's Gamble: SEC Targets Ripple With $2 Billion Fine in High-Stakes Enforcement Push

Bloomberg: SEC Blasted by Judge for 'Abuse of Power' in Crypto Case Against DEBT Box

Reuters: US SEC seeks $2 billion from Ripple Labs, chief legal officer says

Unchained Podcast is Produced by Laura Shin Media, LLC. Distributed by CoinDesk. Senior Producer is Michele Musso and Executive Producer is Jared Schwartz.

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