Breaking: Ethereum Foundation Under Investigation By A State Authority

The Ethereum Foundation is reportedly under investigation by a State Authority, a new update disclosed through the protocol’s GitHub repository.

The Unclear Inquiry Into Ethereum Foundation

According to the GitHub update, the disclosure of the inquiry was made weeks ago, marking the first time any State Authority will be issuing such a probe into the Ethereum blockchain developer.

“This commit removes a section of the footer as we have received a voluntary enquiry from a state authority that included a requirement for confidentiality,” said Pablo Pettinari, one of the core developers at the Ethereum Foundation, in a commit on February 26.

The GitHub commit showed the removal of contact, another bizarre trend that negates its core tenets of transparency. The inquiry also led to the removal of a canary that represented the Ethereum network from the foundation’s website. Per the Wayback Machine data, this canary feature and its associated text were present in January.

The community has been thrown into undue speculation following the breaking of the inquiry. With the Ethereum Foundation currently not sharing additional details about the probe, any potential fallout in the long term will go a long way in helping stakeholders understand what the core challenge is.

Ethereum remains a controversial digital currency as it relates to its security classification. Through a series of intricate events, there are allegations of a likely conflict of interest with Jay Clayton, the former Chairman of the United States Securities and Exchange Commission (SEC) who filed a lawsuit against XRP days before leaving office.

Many in the community postulated that this lawsuit was directed at XRP to stump competition, however, there is no evidence at the moment to connect this with the current State Authority inquiry.

While the price of Ethereum recorded a knee-jerk reaction to the news, there is stability in the market at the moment. Over the past 24 hours, Ethereum has recorded a 0.82% uptick with its price pegged at $3,316.02. To complement this rare bullish twist, the coin’s trading volume is up 8.45% to $34,886,760,871.

Crypto Entities and Federal Probes

Just as the Ethereum Foundation is facing a probe by a State Authority, other crypto-based entities have had their fair share of related probes in recent times. 

Binance was under investigation by the United States Department of Justice (DoJ) for years, a probe that ended in a settlement last year. The settlement, which is worth about $4.3 billion in monetary terms, was regarded as one of the largest scores by the DoJ, FinCEN, and CFTC at the time. It also led to the resignation of co-founder and former CEO Changpeng ‘CZ’ Zhao from the company.

Besides this historic event, other platforms including Coinbase Global Inc. remain in a tight legal battle with the Securities and Exchange Commission (SEC) over some of its offerings.