State Authority Launches Investigation into Ethereum Foundation

[tacokai]

Has anyone heard more about this? The Ethereum Foundation, a Swiss non-profit organization central to the Ethereum ecosystem, is reportedly under investigation by an undisclosed "state authority," as indicated in the group's GitHub repository on its website. The extent and focus of the investigation remain unclear at present. As per the GitHub commit dated February 26, 2024, the Foundation stated, "we have received a voluntary inquiry from a state authority that included a requirement for confidentiality.

https://www.coindesk.com/business/2...ation-under-investigation-by-state-authority/

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[wellington]

SEC investigating since switch to PoS which is arguably similar to PoW if you want to get technical.

Started in 2022.

My partners invest into staking from their profits selling gas to East Africa from Dubai - set up the Centre myself.

Personally can't see how it's not more decentralized than Bitcoin IMO from a purely technical vantage point.

Ref Foundation etc and upgrades - Bitcoin has similar or at least mechanisms that could be argued similar in function.

Personally see it as a opportunity.

Impact would be vast initially but tech under pins a lot of state blockchain adoption (can't openly refer) but will say from West to East to south to North many of the states are incorporating EVM clones and redeployments into their existing processes.

Then there's all the adoption directly on EVM and on-chain or connected to chain.

IMO ETH is stronger (through adoption) than what ever the SEC can throw at it - I.e may take a hit but the tech wins out so the price follows.

Also one other thing case law is clear - the asset itself isn't inherently a security - ergo actions by say foundation may have securities impacts - but ETH itself isn't in itself a security.

Then factor in the decentralized validation of the chain - it's hard to argue it's a security from that point - even with liquid staking - as that's decentralized over copious machines around the world managed by copious individuals or entities known or unknown.

So basically the lower they push it the harder our firm will push in and I am sure many others will.

 

[jafo]

Thank you for the explanation!

wellington said:
Personally see it as a opportunity.
Click to expand...

Would you mind expanding on this?

 

[wellington]

jafo said:
Thank you for the explanation!

Would you mind expanding on this?
Click to expand...

I don't see how it could be declared a security in a court of law considering the case law (extensive) that I've read or observed with existing cases as they went through the system.

Ripple case also set a precedent which was supported by various other cases or settlements.

In addition the SEC already declared PoW as commodity (ETH) so are now trying to say that PoS is a security (ETH) and trying to pin the efforts on Ethereum Foundation.

Only the foundation is just one of the inputs and there's a host of developers who's efforts go into a coordinated movement to roll out changes/upgrades.

Additionally there's the numerous validators that are known and unknown (known where publicly validating) - and unknown where not openly advertising - then there's liquid validators that validate via known / unknown compute providers - the validation is decentralized on a scale Bitcoin could only dream of - and that's evidently a commodity.

So I see a lot of noise but nothing tangible and even if they declare in court the conversion was a security - unlikely - the underlying asset itself isn't inherently a security - thus eth isn't a security.

 

[void]

wellington said:
SEC investigating since switch to PoS which is arguably similar to PoW if you want to get technical.

Started in 2022.

My partners invest into staking from their profits selling gas to East Africa from Dubai - set up the Centre myself.

Personally can't see how it's not more decentralized than Bitcoin IMO from a purely technical vantage point.

Ref Foundation etc and upgrades - Bitcoin has similar or at least mechanisms that could be argued similar in function.

Personally see it as a opportunity.

Impact would be vast initially but tech under pins a lot of state blockchain adoption (can't openly refer) but will say from West to East to south to North many of the states are incorporating EVM clones and redeployments into their existing processes.

Then there's all the adoption directly on EVM and on-chain or connected to chain.

IMO ETH is stronger (through adoption) than what ever the SEC can throw at it - I.e may take a hit but the tech wins out so the price follows.

Also one other thing case law is clear - the asset itself isn't inherently a security - ergo actions by say foundation may have securities impacts - but ETH itself isn't in itself a security.

Then factor in the decentralized validation of the chain - it's hard to argue it's a security from that point - even with liquid staking - as that's decentralized over copious machines around the world managed by copious individuals or entities known or unknown.

So basically the lower they push it the harder our firm will push in and I am sure many others will.
Click to expand...

your post is all just one big WISH

 

[latindev]

wellington said:
Personally can't see how it's not more decentralized than Bitcoin IMO from a purely technical vantage point.
Click to expand...

What?? ns2 More than 50% of the whole Ethereum staking market for validation is owned by 4 businesses.

I don't have any issues with it being so centralized since I don't really care about it but saying it's more decentralized on a purely technical vantage point is just ignoring how reality works

 

[Jorozey]

Just FUD

Weak hands should sell their coins before the price continues to rise, it's part of the game thu&¤#

 

[wellington]

latindev said:
What?? ns2 More than 50% of the whole Ethereum staking market for validation is owned by 4 businesses.

I don't have any issues with it being so centralized since I don't really care about it but saying it's more decentralized on a purely technical vantage point is just ignoring how reality works
Click to expand...

Name these four companies

 

[latindev]

wellington said:
Name these four companies
Click to expand...

Lido, Coinbase, Binance and Kraken... And before you ask for proof, here is one of them: https://www.coingecko.com/research/publications/ethereum-staking-statistics but with an easy search you can find more places stating basically the same

 

[wellington]

Weak sauce.

Lido is just a system, for example we host lido staking, amongst others...

We have no control over the underlying assets, and in addition we have no method for changing the consensus of the chain without a majority...

As for Coinbase, Binance, Kraken, arguably the same can be said for BTC, in addition these are custodial holders, nothing more.

 

[latindev]

wellington said:
Weak sauce.

Lido is just a system, for example we host lido staking, amongst others...

We have no control over the underlying assets, and in addition we have no method for changing the consensus of the chain without a majority...
Click to expand...

Lido is not "just a system", Lido operators are from a list curated by them so is in their power who is and who isn't an operator (it's even on their site: Apply to be a Lido Node Operator). So at the end of the day Lido OWNS ~30% of the staking network

wellington said:
As for Coinbase, Binance, Kraken, arguably the same can be said for BTC, in addition these are custodial holders, nothing more.
Click to expand...

And the other 20% is owned by custodial holders that have full access to the funds and can do what they want... Will they do something? Of course not since there is more money in the long run being a good actor but that's not what I said.

Can you say the same from BTC? Of course not, because you don't vote in the consensus with funds but with compute power so $1 is the same as $1b if the machine is the same 🙂

 

[JackAlabama]

wellington said:
In addition the SEC already declared PoW as commodity (ETH) so are now trying to say that PoS is a security (ETH) and trying to pin the efforts on Ethereum Foundation.
Click to expand...

They doomed itself by jumping to pos to save energy and calling themselves ultrasound money (which is not true, bc they can just change to whatever by hardfork xyz).
Eth oozes countless indications of being centralized since they can just switch just like that from pow to pos (which is indeed very close to being a security bc of yield which is called internet bond dividend or whatever marketing trick they pull out).

Since they can just do that, another ruling will take place and eth being labeled as a security. Good chance they get that now, because no commodity I know has ever produced any yield of some form.
😉.
I have never seen oil making more oil in itself and sadly my gold and silver coins don't procreate either and dont give me some mini-nuggets.

Theres a few resources to watch why eth is a highly questionable startup at best and a big fraud at worst. (which doesnt mean one cannot made money trading it tho until its sure demise).

https://twitter.com/x/status/1724262514278519257
https://twitter.com/x/status/1760770073071907250
https://twitter.com/x/status/1669599891742691328

Last edited: Mar 21, 2024

 

[wellington]

latindev said:
Lido is not "just a system", Lido operators are from a list curated by them so is in their power who is and who isn't an operator (it's even on their site: Apply to be a Lido Node Operator). So at the end of the day Lido OWNS ~30% of the staking network


And the other 20% is owned by custodial holders that have full access to the funds and can do what they want... Will they do something? Of course not since there is more money in the long run being a good actor but that's not what I said.

Can you say the same from BTC? Of course not, because you don't vote in the consensus with funds but with compute power so $1 is the same as $1b if the machine is the same 🙂
Click to expand...

30% if as you believe isn't centralized

Otherwise the same argument can be had for the US mining pools making bitcoin centralized.

JackAlabama said:
They doomed itself by jumping to pos to save energy and calling themselves ultrasound money (which is not true, bc they can just change to whatever by hardfork xyz).
Eth oozes countless indications of being centralized since they can just switch just like that from pow to pos (which is indeed very close to being a security bc of yield which is called internet bond dividend or whatever marketing trick they pull out).

Since they can just do that, another ruling will take place and eth being labeled as a security. Good chance they get that now, because no commodity I know has ever produced any yield of some form.
😉.
I have never seen oil making more oil in itself and sadly my gold and silver coins don't procreate either and dont give me some mini-nuggets.

Theres a few resources to watch why eth is a highly questionable startup at best and a big fraud at worst. (which doesnt mean one cannot made money trading it tho until its sure demise).

https://twitter.com/x/status/1724262514278519257
https://twitter.com/x/status/1760770073071907250
https://twitter.com/x/status/1669599891742691328
Click to expand...

SEC doesn't give a hoot about the activities in 2014/15/16/17 etc - outside of statutes and declared a commodity

They care about post switch to PoS.

As for oil yielding oil - well oil sitting still in a pool of oil mixed with x produces offshoots / blends, potato's sitting in the ground produce new potato's, cattle sitting in a ranch breeds new cattle

Arguably “staking”.

Eth sitting in a pool + electrical input for math = eth

One final statement - regardless of your arguments.

ETH isn't a security

The method in which it's marketed/sold may have been a securities contract.

But ETH itself inherently will never be a security as per case law - in pretty much every historical case.

Last edited: Mar 21, 2024

 

[JackAlabama]

wellington said:
30% if as you believe isn't centralized

Otherwise the same argument can be had for the US mining pools making bitcoin centralized.


SEC doesn't give a hoot about the activities in 2014/15/16/17 etc - outside of statutes and declared a commodity

They care about post switch to PoS.

As for oil yielding oil - well oil sitting still in a pool of oil mixed with x produces offshoots / blends, potato's sitting in the ground produce new potato's, cattle sitting in a ranch breeds new cattle

Arguably “staking”.

Eth sitting in a pool + electrical input for math = eth

One final statement - regardless of your arguments.

ETH isn't a security

The method in which it's marketed/sold may have been a securities contract.

But ETH itself inherently will never be a security as per case law - in pretty much every historical case.
Click to expand...

since youre invested deep into eth. Dont you have any comments regarding these well curated twitter video snippets etc?
Doesnt it look at least somewhat sus or is it all just made up?

 

[wellington]

JackAlabama said:
since youre invested deep into eth. Dont you have any comments regarding these well curated twitter video snippets etc?
Doesnt it look at least somewhat sus or is it all just made up?
Click to expand...

I'm not invested deeply into ETH as in the token - we are infrastructure providers the day to day movements do not in any $ value capacity excite or annoy us - we leave that for the kids speculating on price action rather than mathematically backed and forecasts macro viewpoint of adoption and future multipliers - what happens in the US also we see as irrelevant except liquidity drains short term - the rest of the world doesn't give a hoot as they are building on it, clones of it, or incorporated into it.

As for the snippets last time I checked (Twitter) they were all related to a Swiss entity that did an ico about a idea which is outside of any statute of limitations.

So irrelevant

 

[void]

wellington said:
ETH isn't a security
Click to expand...

ETH is by no means a commodity which is what matters and cannot serve as good money

the rest is just politics and rhetoric - I personally don't give a s**t about the law imposed by mafia to serve their purpose or what especially blatantly corrupt SEC says but following purely the definition... it's a security

 

[Jorozey]

void said:
ETH is by no means a commodity which is what matters and cannot serve as good money

the rest is just politics and rhetoric - I personally don't give a s**t about the law imposed by mafia to serve their purpose or what especially blatantly corrupt SEC says but following purely the definition... it's a security
Click to expand...

Simple thu&¤#

 

[JosephLL]

ETH is the a*****e from which all shitcoinery is spawned. It clearly passes the Howey test for being a (unregistered) security for anyone having common sense. It won't be sued however because it is steategically being kept undead for the purrpose of being used as a weapon against bitcoin if /when such scenario is needed in the future. The faster the ecosystem moves away frim erc20 usdt to liquid usdt to decouple from it the better.

This campaign is probably just to signal that eth etf is doa.

 

[JackAlabama]

wellington said:
I'm not invested deeply into ETH as in the token - we are infrastructure providers the day to day movements do not in any $ value capacity excite or annoy us - we leave that for the kids speculating on price action rather than mathematically backed and forecasts macro viewpoint of adoption and future multipliers - what happens in the US also we see as irrelevant except liquidity drains short term - the rest of the world doesn't give a hoot as they are building on it, clones of it, or incorporated into it.

As for the snippets last time I checked (Twitter) they were all related to a Swiss entity that did an ico about a idea which is outside of any statute of limitations.

So irrelevant
Click to expand...

Not really irrelevant tho, because the underlying issues do not seem to have been cleaned up e.g. in contrast to tether where the issues from the past have been cleaned up.
Or has smth been done to mitigate that?

For example an allegation from the video series is (even today by looking at the btc/eth chart, it looks managed to prop it up) by the foundation or the other (hidden) oligarchy elements.
Also other allegations from the video series are new and dont have anything to do with smth from the past but are relevant today for any user/investor.

Id not care about past "legal breaches" which are kinda moot and irrelevant to me (legal stuff today is mostly made up bs anyway under lawfare) and as you say has been expired anyway but more to understand how deep the rot really is today.

There are some which makes the eth ecosystem non-investable and non-usable.

Last but not least a bunch of nerds dancing to some buzzwords is just not confidence instilling to me at least, but thats a personal taste.

 

[Raul78]

is FUD for you sell ETH on ETH/BTC bottom range