SEC's Ether Stance Under Scrutiny as Timmons Seeks Clarity

Republican Representative William Timmons has formally requested documents from the US Securities and Exchange Commission (SEC) regarding the agency's historical approach to Ether (ETH). In a letter addressed to SEC Chair Paul Atkins, Timmons sought specific documents that outline the SEC's past views on the status of Ether. This request aims to provide clarity to the public and Congress about the agency's stance under its previous leadership, particularly during the tenure of Chair Gary Gensler.

Timmons highlighted the inconsistency in the SEC's treatment of Ether, noting that under former Director of Corporate Finance William Hinman, the agency had stated in 2018 that it would not treat Bitcoin (BTC) or Ether as securities. However, Timmons argued that Gensler's tenure saw a shift in this approach. During an April 2023 congressional hearing, Gensler repeatedly declined to answer questions about whether the SEC views Ether as a security, which Timmons interpreted as casting doubt on Ether's status. This ambiguity was further complicated by the revelation that the SEC had approved a formal investigation into whether Ether is a security just days before Gensler's testimony.

The SEC's actions in the following year added to the confusion. In 2024, the agency approved Ether exchange-traded funds, a move that Timmons suggested would only be appropriate if Ether is not considered a security. Shortly after, the SEC closed its probe into Ether, further muddying the waters for market participants. Timmons emphasized that these inconsistent actions have caused significant confusion and destabilization for millions of American crypto-market participants.

Timmons' letter comes on the heels of a Freedom of Information Act (FOIA) request backed by a major crypto exchange in 2023. The request sought documents about the SEC's views on Ether, but the agency denied it, leading to a lawsuit by the exchange over alleged FOIA violations. A judge later ordered the SEC to disclose certain documents, many of which were subsequently made public. One of these documents revealed that prosecutors in New York had unsuccessfully sought the SEC's opinion on Ether, further highlighting the internal divisions within the agency regarding its stance on digital assets.