U.S. Lawmaker Demands SEC Disclose Ethereum Legal Status Documents

U.S. Representative William Timmons from South Carolina has called on the Securities and Exchange Commission (SEC) to disclose internal documents that detail the agency's evolving stance on the legal status of Ethereum (ETH). In a letter to SEC Chair Paul Atkins, Timmons highlighted the SEC's inconsistent approach to ETH, describing it as "zigzagging" and expressing concern over the lack of transparency that has left the public and crypto market participants in the dark.

Timmons has requested specific internal documents from the SEC, including emails discussing whether Ethereum qualifies as a security, records related to the ETH 2.0 investigation, and files titled “ETH – Security or Not” and similar subjects. These documents were previously identified in a lawsuit involving Coinbase but have not been made public.

In 2018, the SEC's Director of Corporate Finance, William Hinman, stated that Ether and Bitcoin would not be treated as securities, providing some clarity to the crypto community. However, under the leadership of Chair Gary Gensler and the Biden administration, the rules have become less clear, with the SEC refusing to offer more clarity on their security status. Timmons emphasized that this confusion is detrimental to both businesses and individuals interested in crypto, stating, “The American people and the crypto community deserve transparency as Congress moves forward with the CLARITY Act.”

Timmons believes that releasing these records will provide valuable insights into how the SEC's view on Ethereum has changed over time. He also hopes that this disclosure will shed light on the SEC's "regulation by enforcement" strategy, which he argues has hindered innovation and confused investors. By making these documents public, Timmons aims to foster a more transparent and predictable regulatory environment for the crypto industry.