Recent reports indicate that the SEC remains steadfast in its intent to classify Ethereum as a security, despite prior approval of Ethereum futures ETFs. This stance could spell significant losses for companies involved with the altcoin, exacerbating disagreements with the CFTC.
Fortune magazine revealed that multiple US firms received subpoenas from the SEC, demanding details of their dealings with the Ethereum Foundation. Speculation within the crypto community suggests the Ethereum Foundation also received a similar directive, supported by the removal of specific text from their website in late February.
Additionally, the removal of the yellow canary logo, typically indicating the absence of confidential subpoenas, further fueled suspicions. Web developer Pablo Pettinari later confirmed the receipt of the government agency's letter by the foundation.
For Ethereum investors, this development signals trouble, potentially leading to Ethereum falling further behind Bitcoin as investors become more aware of associated risks. Hopes for spot Ethereum ETFs by May are dwindling, with approval chances now estimated at less than 30%.
Moreover, Ethereum's security status may deter US companies from engaging with the altcoin, given the heightened regulatory requirements. Institutional investors appear to be anticipating these developments, as evidenced by increased outflows from Ethereum ETFs, totaling $14 million last week, with this trend expected to escalate further.
