The Ethereum Foundation, the non-profit organization responsible for the world’s second-largest blockchain network, is under investigation by an unnamed government agency, as per information on their GitHub repository.
At the time of the press, the investigation’s extent and focus remained undisclosed. A GitHub commit dated Feb. 26, 2024, revealed the Ethereum Foundation’s receipt of a voluntary inquiry from a state authority, with confidentiality mandated.
The Ethereum Foundation’s website boasts transparency, stating they would disclose any government inquiries beyond routine business interactions.
Notably, this disclosure and a “warrant canary” (a digital indicator of non-interference) were removed in the aforementioned February update. Warrant canaries are often used by companies to signal they haven’t received secret government requests for information.
Possible explanations for the investigation point towards regulatory scrutiny. Legal experts speculate a Swiss regulator, potentially collaborating with the U.S. Securities and Exchange Commission (SEC), could be involved. The SEC is currently reviewing Ether ETF applications, with analysts expressing skepticism about their approval due to limited interaction between applicants and the SEC.
The inquiry is conducted at a point in time when Ethereum’s technology is evolving. Launched in 2015 after an initial coin offering for the chain’s native ETH currency. The network recently underwent a major upgrade (“Dencun”) aimed at reducing transaction fees, and the U.S. awaits a decision on several applications for an Ether-based exchange-traded fund (ETF) with a key deadline looming in May.
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