UNCHAINED: The Real Reason Why the SEC Might Be Going After Ethereum
CoinDesk Podcast Network
Evaluating the Misconception about ETH and Digital Assets as Securities
Exploring how digital assets like ETH are not securities but can play a role in securities transactions under the Howie test, highlighting the evolving legal understanding that they should not be treated as standalone securities, but may be part of investment contracts.
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
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
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
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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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