By Stacy Elliott and Sander Lutz
4 min read
The Ethereum Foundation received a "voluntary enquiry from a state authority that included a requirement for confidentiality," according to a commit message posted to GitHub last month.
The foundation didn't name the "state authority" in its GitHub commit message and did not immediately respond to a request from Decrypt for comment.
The news, which was first reported by Coindesk on Wednesday, appears to have flown under the radar since February 26, 2024. That's when Ethereum Foundation frontend developer Pablo Pettinari added it to the Ethereum Foundation website's code repository.
The Ethereum Foundation is a non-profit organization that works to support the Ethereum ecosystem. But, critically, has always maintained that it does not own or control the network.
"We are part of a larger community of organizations and individuals that fund protocol development, grow the ecosystem, and advocate for Ethereum," the organization says on its website.
The foundation's website used to say that the nonprofit had never been contacted by an agency that requires the contact to be kept secret. "Stiftung Ethereum will publicly disclose any sort of inquiry from government agencies that falls outside the scope of regular business operations," it said.
The footer message was removed the same day the commit message said the foundation has been contacted by the unnamed state agency along with the website's warrant canary.
A warrant canary is usually a string of text or image—the Ethereum Foudation's used to be a colorful bird. It stays on the website as long as the company hasn't been served with a secret government subpoena or document request.
While it has not yet been established which government has launched an inquiry into the Ethereum Foundation, the organization is based in Switzerland, where it falls under the purview of the Swiss Financial Market Supervisory Authority (FINMA).
Decrypt reached out to FINMA but did not immediately receive a response.
In the United States, several crypto companies have recently received subpoenas from the U.S. Securities and Exchange Commission (SEC) demanding any documents or financial records related to their dealings with the Ethereum Foundation, according to a report published Wednesday by Fortune.
It is as of yet unclear whether the SEC’s inquires into the organization are directly connected to the “state authority” inquiry revealed on Github.
An SEC spokesperson told Decrypt that the agency “does not comment on the existence or nonexistence of a possible investigation.”
It appears certain, however, that the SEC has continued to ratchet up its scrutiny of Ethereum even as financial firms seek to gain approval of spot Ethereum ETFs on Wall Street. The federal regulator has repeatedly punted on approving Ethereum ETF applications from traditional finance behemoths like BlackRock, even after the historic approval of spot Bitcoin ETFs in January.
ETF experts previously predicted that because the SEC already approved Ethereum futures ETFs back in October, the regulator is now legally obligated to approve spot Ethereum ETFs, based on a federal appeals court ruling last year that essentially cemented that reality in the case of Bitcoin ETFs.
Futures ETFs track the price of derivatives contracts, which themselves grant the buyer the ability to buy or sell assets at a later date. No ETH is actually bought and sold when Ethereum futures ETFs are traded. Spot Ethereum ETFs, on the other hand, would actually involve issuers buying and storing ETH on behalf of clients.
Though legal precedent would appear to imply that spot Ethereum ETFs are a foregone conclusion, it doesn’t seem the SEC views things that way. According to today’s report in Fortune, the agency has been aggressively issuing Ethereum- and Ethereum Foundation-related subpoenas to crypto companies as recently as a few weeks ago.
Editor’s note: This story has been updated to include information on the SEC’s recent Ethereum Foundation-related subpoenas, a statement from the SEC, and information regarding the Swiss Financial Market Supervisory Authority.
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