The U.S. Securities and Exchange Commission (SEC) has launched an investigation into several %Ethereum (CRYPTO: $ETH) companies, throwing into doubt the likelihood that the Wall Street regulator will approve spot Ethereum exchange-traded funds (ETFs) in coming months.
According to a report in Fortune magazine, the investigation comes as the SEC looks to classify Ethereum as a security similar to a stock.
Such a move by the regulator would have serous implications for Ethereum and the entire cryptocurrency sector.
The SEC has reportedly sent investigative subpoenas to U.S. companies in the past several weeks as it ramps up its investigation.
The timing of the investigation also throws into doubt the SEC’s approval of spot Ethereum ETFs that was expected by the beginning of June this year.
The SEC us currently evaluating multiple applications for an Ethereum ETF, with the first deadline to rule on an application coming at the end of May.
In January of this year, the SEC approved spot Bitcoin ETFs for the American market and there had been hope that the regulator would do the same for Ethereum ETFs.
However, the SEC also sought to classify %Bitcoin (CRYPTO: $BTC) as a security but lost that battle in court when %Cryptocurrency exchanges and other companies pushed back against the classification.
Ethereum’s price is up 45% this year and trading at $3,411.00 U.S. per token.
