# 🟣 The Ethereum FUD is Increasing

> Should You Sell Your $ETH ASAP?

**Published by:** [Web3 Academy](https://paragraph.com/@web3academy/)
**Published on:** 2024-03-22
**Categories:** cryptocurrency, web3
**URL:** https://paragraph.com/@web3academy/the-ethereum-fud

## Content

GM DOers! 😎 Ethereum got kicked in the balls this week… hard. 🫣 First up, we found out that the Ethereum Foundation is being investigated by a state authority. Watcher.Guru @WatcherGuru JUST IN: Ethereum Foundation under investigation by State Authority, CoinDesk reports. 7,682 20:50 • 20 Mar 2024 Secondly, the SEC has delayed their decision on VanEck’s spot ETF application – but we were expecting that. 🤷 The Block @TheBlock__ SEC delays decision on VanEck spot Ethereum ETF, asks for public comments theblock.co SEC delays decision on VanEck spot Ethereum ETF, asks for public comments The SEC is delaying its decision timeline on another spot Ethereum exchange-traded fund, the VanEck Ethereum ETF. 87 22:48 • 20 Mar 2024 Thirdly, the Chairman of the U.S. House Committee on Financial Services says that the SEC and Gary Gensler are looking to classify $ETH as a security. 😨 Patrick McHenry @PatrickMcHenry Reports indicate @GaryGensler is moving to unilaterally classify #ETH as a security. This is contrary to the @CFTC's assessment and the @SECgov's prior actions. Congress decides the SEC's jurisdiction and budget, Chair Gensler doesn't get to make it up as he goes along. Financial Services GOP @FinancialCmte #WATCH: Chairman @PatrickMcHenry demands Chair Gensler share his views on #ETH. After publicly defining #Bitcoin as a commodity multiple times, @GaryGensler's response: Watch Chairman McHenry grill Gensler on his contradictory views on digital assets 3,038 2:16 • 21 Mar 2024 Ouch… That’s some hard kicks. But let’s debunk each one to see if any of this FUD has any substance. P.S. - At the end, I’m sharing what I’m doing with my $ETH, so you know how to put it to work. P.S.S. - We’re also highlighting the NFT Of The Month, so stick around. Let’s go. ⏬The Ethereum FUD Explained 😨The Ethereum Foundation has just entered the crosshairs of the SEC… Again. Earlier this week, a so-called “Warrant Canary”, aka the colorful bird below, disappeared from Ethereum Foundation’s website.This bird was basically a way of telling people that the Foundation has not received any actions (i.e. lawsuits) or requests (i.e. subpoenas) from the government or law enforcement authorities. With it gone, it suggests, in a discreet way, that the Ethereum Foundation has been approached by government authorities. In the GitHub code, the dev who removed this canary left a note saying “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”.In other words, the FBI is knocking on the door. This is part of a larger investigation into Ethereum, which apparently started after the merge (from proof-of-work to proof-of-stake). A report from Fortune indicates that the SEC is requesting documents from several U.S. firms to support the argument that $ETH should be considered a security. Now, there’s basically 2 explanations for this investigation. 1/ It’s completely normal for the SEC to do their due diligence, especially with a final decision on several ETF applications coming up in May. Besides, crypto firms are pretty used to getting subpoenas from the SEC by now. 2/ This is a coordinated attack against Ethereum, and a way for Gary Gensler and the SEC to find reasons why they should deny the ETF in May. The latter is obviously what most crypto people think is going on here. Travis Kling @Travis_Kling So this now very obviously feels like a coordinated attack on ETH. Hmm. That’s interesting in light of Larry’s 576-1 record and the simple fact that he is unequivocally more powerful than Gary. Wonder what’s gonna happen. 321 23:57 • 20 Mar 2024 Regardless, the SEC chose to delay their decision on VanEck’s spot Ethereum ETF application, something everyone was expecting either way. The main deadline we’re watching for in regards to the spot ETH ETF is May 23rd. Analysts from Bloomberg and prediction markets are estimating a 25% likelihood that the approval will happen in May. It’s not looking good, and before the approval can happen, the SEC needs to officially admit that $ETH isn’t a security. Is $ETH a Security or Not? 🤷Honestly, I barely understand what a security is. But if Ethereum gets slapped with that label, I know it means a lot more rules and paperwork for anyone wanting to play with it – kind of like needing a permit to throw a Frisbee in the park. I also know it’s going to be bad news for my bags. 😕 So I’ll let Paul Grewal, the Chief Legal Officer at Coinbase tell us whether or not Ethereum is a security. TL;DR, he says it’s not. Here are a few reasons why. 1/ paulgrewal.eth @iampaulgrewal Ex. A. Senior SEC officials have said ETH is not a security, see e.g. SEC Director of Corporation Finance Hinman’s statement docs.google.com/document/d/13O… 3/10 567 5:03 • 21 Mar 2024 2/ paulgrewal.eth @iampaulgrewal Ex. B. Before he was SEC Chair, Gary Gensler himself testified before Congress that ETH is not a security, see his testimony congress.gov/115/meeting/ho… 4/10 662 5:03 • 21 Mar 2024 3/ paulgrewal.eth @iampaulgrewal Ex. C. And even very recently, the SEC’s trial lawyers continue to compare ETH to BTC, see storage.courtlistener.com/recap/gov.usco… 5/10 courtlistener.com Transcript – #87 in Securities and Exchange Commission v. Ripple Labs Inc. (S.D.N.Y., 1:20-cv-108... TRANSCRIPT of Proceedings re: CONFERENCE held on 3/19/2021 before Magistrate Judge Sarah Netburn. Court Reporter/Transcriber: Lisa Picciano Franko, (212) 805-0300. Transcript may be viewed at the... 497 5:03 • 21 Mar 2024 4/ paulgrewal.eth @iampaulgrewal The CFTC and federal courts have consistently confirmed that ETH is a commodity. 6/10 523 5:03 • 21 Mar 2024 5/ paulgrewal.eth @iampaulgrewal Ex. D. ETH futures contracts started trading on CFTC-regulated futures exchanges in 2021. 7/10 485 5:03 • 21 Mar 2024 This point is actually pretty important, and sustained by Brian Quintenz, the Global Head of Policy at a16z. Brian Quintenz @BrianQuintenz Reminder: 1/ When the SEC allowed ETH Futures ETFs to trade on its regulated security exchanges, it explicitly acknowledged the status of the underlying, ETH, as being a non-security and outside of its jurisdiction. 2,840 1:31 • 21 Mar 2024 6/ paulgrewal.eth @iampaulgrewal Ex. F. Even if we were to apply Howey, ETH utterly fails that test, and nothing about the merge changes that conclusion. 9/10 424 5:03 • 21 Mar 2024 Conclusion paulgrewal.eth @iampaulgrewal The SEC has no good reason to deny the ETH ETP applications. And we hope they won’t try to invent one by questioning the long established regulatory status of ETH, which the SEC has repeatedly endorsed. That’s not how the law works. And Americans deserve better. 10/10 1,265 5:03 • 21 Mar 2024 Wrapping Up – What Should You Do Now? 🤔1/ Stop worrying! 2/ Ethereum is not a security (I think we established that above). 3/ Ethereum’s ETF is coming this year gaut is doing nothing @0xgaut BlackRock’s ETF Approval Record is 576-1. They just deposited $100M to test out Ethereum. I wonder who wins. 1,208 22:26 • 20 Mar 2024 Even if the ETF applications get denied in May, that’ll only lead to a bunch of lawsuits against the SEC, which will lead to an inevitable approval at some point. sassal.eth/acc 🦇🔊 @sassal0x Maybe I'm reading too much into this (*dons tin foil hat*), but this signals to me that Coinbase is ready to sue the SEC if they deny the ETH ETFs on May 23rd. We already know Grayscale will sue, but Coinbase joining that party would be a sight to behold. Fuck the SEC. paulgrewal.eth @iampaulgrewal The SEC has no good reason to deny the ETH ETP applications. And we hope they won’t try to invent one by questioning the long established regulatory status of ETH, which the SEC has repeatedly endorsed. That’s not how the law works. And Americans deserve better. 10/10 656 5:12 • 21 Mar 2024 4/ Zoom out. The world's largest asset manager, BlackRock, is building on Ethereum. sassal.eth/acc 🦇🔊 @sassal0x BlackRock launching a yield-bearing stablecoin on Ethereum is still one of the most bullish things to ever happen in crypto and the market has definitely not digested this yet Bullish ETH Coinbase Institutional 🛡️ @CoinbaseInsto We are excited to announce that Coinbase has been chosen as a key infrastructure provider for @BlackRock and @Securitize Tokenized Investment Fund. 1,719 6:19 • 21 Mar 2024 Clearly, $ETH is undervalued at today’s prices, so keep stacking, put your coins to work and chill. Here’s what I’m doing right now.Also, here’s a SUPER helpful guide put together by our G.O.A.T community member Kuba, on how to navigate LRTs (liquid restaking tokens).If you’re not already in our Discord, then WTF are you doing? Join us now! The NFT Of The Month is... The PlooshiesPlooshies is a collection that showcases 3333 fully rigged and animated 3D models of 11 unique characters. The project aims to bring childhood memories back to life through interactive storytelling.Next week, we're doing Token Of The Month, where we'll feature 4 tokens suggested by our community. Reply to this email with your suggestion on which coins we should pick. Thanks for reading. And remember, you're strong, you’re powerful, you’re alpha! ❤How'd you feel about our read today?⭐⭐⭐⭐⭐ Loved it!⭐⭐⭐ Decent!⭐ Kyle, step it up!Are You Fairly New to Crypto & Web3?Let us help you wrap your head around this industry that’s constantly transforming. Take our Free 1-hour Web3 Rabbit Hole Course to learn the foundational components you need to start building and investing successfully.Take FREE Rabbit Hole Course NowRecommended Tools 🛠Secure Your Crypto w/ a Hardware Wallet – Get a Ledger TodayJoin us on Discord | Follow us on TwitterAdvertise with Web3 Academy Disclaimer: This article is for informational purposes only and not financial advice. Conduct your own research and consult a financial advisor before making investment decisions or taking any action based on the content.

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