SEC has been investigating ETH for over a year, new court filing shows 

The SEC in March 2023 launched its formal investigation into ether, lawyers from Consensys allege in new, unredacted complaint

article-image

Mark Van Scyoc/Shutterstock modified by Blockworks

share

The US Securities and Exchange Commission has been investigating ethereum and its potential status as a security for over a year, new court filings Monday reveal. 

Consensys, which filed its lawsuit against the SEC last week, alleges the SEC has been quietly building its case against ether since at least early 2023 in a plan to reverse its previous public assertion that the asset is a commodity. 

The crypto firm claims that SEC director of the division of enforcement Gurbir Grewal in March 2023 approved a Formal Order of Investigation into the buying and selling of ether. Formal Orders allow the agency to issue subpoenas and collect witness testimony under oath.

Read more: SEC seeks to regulate ETH as a security, Consensys alleges in lawsuit

The timeline, Consensys says, explains why in April 2023 SEC Chairman Gary Gensler refused to answer whether or not ether was a commodity or a security when asked during Congressional testimony

“He did not want to admit that his SEC had already secretly cemented its power-grab by issuing an order of investigation designating ETH as a security,” Consensys’ team wrote in the unredacted complaint, filed Monday. 

Consensys’ suit makes two major claims. First, that ether is not a security and the SEC’s investigation is unlawful. Second, Consensys says the SEC has plans to target the company for its MetaMask product, which securities regulators say is a broker-dealer. 

Read more: Ether is the Schrödinger’s cat of crypto

Consensys received a Wells notice stating the SEC wanted to pursue an enforcement action against them for alleged securities law violations via its MetaMask Swaps and Staking products, the complaint adds. The Wells notice, according to the complaint, does not mention any charges against Consensys relating to ETH specifically.

Historically, the SEC has targeted specific tokens by naming them as securities in lawsuits it files against exchanges. In the agency’s June 2023 lawsuits against Coinbase and Binance, more than ten tokens — whose issuers were not named as co-defendants — were listed as securities in each complaint. ETH was not listed in either suit. 

Representatives from the SEC declined to comment.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (11).png

Research

Union’s technical design brings measured improvements to crosschain interoperability. By combining a consensus-verified hub with novel constructs like state lenses and ZK proofs for client updates, Union achieves an interoperability protocol that is highly performant, trust-minimized, and scalable.

article-image

Singapore’s largest bank is issuing crypto-linked structured notes on Ethereum, but the tokens will remain permissioned

article-image

Jupiter borrows Fluid’s innovative risk engine

article-image

Exchange says all validators now run in distributed clusters, boosting decentralization and fault tolerance

article-image

Retail FOMO is back, with CEX onboarding and search terms up

article-image

The stablecoin payments processor previously raised from the likes of a16z Crypto and Archetype