Key Points
- The Ethereum Foundation is under investigation by undisclosed authorities for alleged involvement in a crime.
- The US Securities and Exchange Commission (SEC) is probing whether Ethereum (ETH) should be classified as a security token.
The Ethereum Foundation, a non-profit organization that oversees the Ethereum network, is being investigated for an alleged crime by undisclosed state authorities.
The Foundation received a notice of voluntary inquiry from an unidentified regulatory body, as reported by CoinDesk, citing the Foundation’s GitHub commit published last month. The notice also included a confidentiality requirement.
Ethereum Foundation’s Possible Connection to Gatecoin Hack
The notice was posted on GitHub in February, but the specifics of the investigation are not yet known. The Foundation has not yet responded to CoinDesk’s request for comment.
In January, an on-chain sleuth known as Boringsleuth suggested that the Foundation might be linked to the 2016 attack on Gatecoin. The Hong Kong-based crypto exchange lost 185,000 Ethereum (ETH) and 250 Bitcoin (BTC) in the exploit.
Boringsleuth claimed that his blockchain analysis tools found that some of the stolen funds were sent to an address belonging to the Swiss-based non-profit organization. He asserted he has evidence to support his claim that the Foundation was involved in the crime.
After posting a thread suggesting the Foundation’s involvement in the Gatecoin hack, Boringsleuth announced that an independent law firm was investigating the matter.
SEC Investigation into Ethereum
Simultaneously, the US Securities and Exchange Commission (SEC) is investigating the Ethereum network. Fortune reported that the SEC’s investigation is focused on determining if Ether should be classified as a security token.
The SEC began its investigation in 2022 following the successful migration of the network to a Proof-of-Stake (PoS) blockchain, known as the Merge. The probe was also extended to the Ethereum Foundation, with the SEC subpoenaing companies that have had business dealings with the Foundation for relevant documents and financial records.
In the wake of the investigation news, Ether’s value has dipped by over 2%, according to CoinMarketCap data.