The Ethereum Foundation, the Swiss non-profit at the heart of the Ethereum ecosystem, is being investigated by an unspecified “state authority,” according to the group’s GitHub repository.As of press time, the investigation’s scope and focus were unknown.According to a GitHub commit dated February 26, 2024, “we have received a voluntary enquiry from a state authority that included a requirement for confidentiality.”
The probe comes at a pivotal moment for Ethereum’s technology and its native asset, ETH, which many American finance firms are looking to provide as an exchange-traded fund.Despite recently authorizing a succession of Bitcoin ETFs, the Securities and Exchange Commission (SEC) has been slow to go further.Following the publishing of this article, Fortune reported that the SEC is attempting to classify ETH as a security, a move that would have significant repercussions for Ethereum, an ETH ETF, and cryptocurrency as a whole.According to Fortune, the financial regulator has sent investigating subpoenas to U.S. corporations in recent weeks.
Previously, the Ethereum Foundation’s website contained the following disclosure:
“The Ethereum Foundation (Stiftung Ethereum) has never been contacted by any agency anywhere in the world in a way which requires that contact not to be disclosed. Stiftung Ethereum will publicly disclose any sort of inquiry from government agencies that falls outside the scope of regular business operations.”
According to the changelog, the footer was removed in a GitHub contribution on February 26th, along with the website’s warrant canary.A warrant canary is typically some type of text or graphic warning (such as a colorful bird, in the instance of the Ethereum Foundation), which some businesses display on their websites to signify that they have never been served with a secret government subpoena or document request.
If a government agency requests information, the corporation may remove the wording to indicate that they received the request without overtly stating so.The Ethereum Foundation’s warrant canary was mistakenly removed in 2019 and was soon restored to the website.
According to an attorney acquainted with the case, a Swiss regulator may have placed a document request on the Ethereum Foundation and may be collaborating with the US Securities and Exchange Commission (SEC).“I also think it’s fair to say the Ethereum Foundation isn’t the only entity they’re looking for information from,” the attorney told CoinDesk, adding that other offshore entities are under investigation.
The SEC is reviewing various applications for an Ether ETF, but analysts following the process are growing increasingly skeptical that any such applications will be accepted by the federal regulator, citing a lack of communication between applicants and SEC officials.“Any rumors of any activity” by the SEC and its overseas equivalents may be tied to the SEC’s May 23 deadline, the attorney added.