Coinbase Said New York Attorney General Asked SEC to Declare Ethereum a Security: Report
By: finance magnates|2025/05/08 04:30:01
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Coinbase released internal U.S. Securities andExchange Commission communications showing that New York's top law enforcementoffice urged the agency to classify Ethereum’s ether (ETH) as a security duringits legal pursuit of crypto exchange KuCoin in 2023. The request, reportedly made by the New York AttorneyGeneral's office, adds another layer to the ongoing debate over digital assetclassifications and the federal agencies responsible for them. NY Wanted SEC to File Statement Supporting ETHSecurity Designation According to Coindesk, the communication came fromShamiso Maswoswe, head of the New York Attorney General’s Investor ProtectionBureau, who explicitly asked the SEC to weigh in on Ethereum’s legal status insupport of the state’s case. Maswoswe noted that while the classification wouldn’tdetermine the case's outcome, since the state has jurisdiction over bothsecurities and commodities, it would help “get a court to hold that Ether is asecurity,” which she argued would enhance investor protection. The SEC, however, remained silent. It had previouslyhinted at Ethereum’s commodity status but became more ambiguous after Ethereumtransitioned to proof-of-stake. Ultimately, the agency refrained from filingany statement on ETH's status in the KuCoin matter. Coinbase released the document as part of a widereffort to make public the communications it has obtained through Freedom ofInformation Act requests. These materials include emails and internal notesthat reveal how federal regulators have handled, or avoided, key decisions oncrypto asset classifications. Regulatory Tensions This latest batch includes messages not only aboutEthereum, but also about Ripple and XRP. In one 2021 email, SEC staff debatedwhether Ripple’s blockchain was decentralized. The SEC was even ordered to return a portion of thepenalties it had previously collected. The friction between NewYork’s request and the SEC’s muted response highlights broader jurisdictionalconfusion at the federal level. While New York's Department of Financial Servicesoversees both securities and commodities, federal regulation remains dividedbetween the SEC and the Commodity Futures Trading Commission (CFTC), withoverlapping and often conflicting mandates. New York’s enforcement action against KuCoin concludedin December 2023, with a $22 million settlement. The state alleged the exchangefailed to register to operate legally. Since President Donald Trump returned to office, hisadministration has signaled a friendlier stance toward digital assets. Hisappointment of Paul Atkins as SEC chairman has already prompted the agency tobegin clarifying which parts of the crypto sector it does not consider underits purview. Coinbase released internal U.S. Securities andExchange Commission communications showing that New York's top law enforcementoffice urged the agency to classify Ethereum’s ether (ETH) as a security duringits legal pursuit of crypto exchange KuCoin in 2023. The request, reportedly made by the New York AttorneyGeneral's office, adds another layer to the ongoing debate over digital assetclassifications and the federal agencies responsible for them. NY Wanted SEC to File Statement Supporting ETHSecurity Designation According to Coindesk, the communication came fromShamiso Maswoswe, head of the New York Attorney General’s Investor ProtectionBureau, who explicitly asked the SEC to weigh in on Ethereum’s legal status insupport of the state’s case. Maswoswe noted that while the classification wouldn’tdetermine the case's outcome, since the state has jurisdiction over bothsecurities and commodities, it would help “get a court to hold that Ether is asecurity,” which she argued would enhance investor protection. The SEC, however, remained silent. It had previouslyhinted at Ethereum’s commodity status but became more ambiguous after Ethereumtransitioned to proof-of-stake. Ultimately, the agency refrained from filingany statement on ETH's status in the KuCoin matter. Coinbase released the document as part of a widereffort to make public the communications it has obtained through Freedom ofInformation Act requests. These materials include emails and internal notesthat reveal how federal regulators have handled, or avoided, key decisions oncrypto asset classifications. Regulatory Tensions This latest batch includes messages not only aboutEthereum, but also about Ripple and XRP. In one 2021 email, SEC staff debatedwhether Ripple’s blockchain was decentralized. The SEC was even ordered to return a portion of thepenalties it had previously collected. The friction between NewYork’s request and the SEC’s muted response highlights broader jurisdictionalconfusion at the federal level. While New York's Department of Financial Servicesoversees both securities and commodities, federal regulation remains dividedbetween the SEC and the Commodity Futures Trading Commission (CFTC), withoverlapping and often conflicting mandates. New York’s enforcement action against KuCoin concludedin December 2023, with a $22 million settlement. The state alleged the exchangefailed to register to operate legally. Since President Donald Trump returned to office, hisadministration has signaled a friendlier stance toward digital assets. Hisappointment of Paul Atkins as SEC chairman has already prompted the agency tobegin clarifying which parts of the crypto sector it does not consider underits purview.
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