Ethereum Foundation Faces Confidential Probe Amid Looming ETF Deadline

The Ethereum Foundation, a pivotal nonprofit organization within the Ethereum ETH/USD ecosystem based in Switzerland, is currently the subject of an investigation by an undisclosed government authority.

What Happened: This development was revealed through an update on the organization's GitHub page, where it was noted that the foundation received a request for information accompanied by a confidentiality clause.

The exact details and focus of this inquiry, reported on Feb. 26, 2024, remain unclear, Coindesk reported.

This investigation emerged amidst significant technological advancements for Ethereum, the world's second-largest blockchain by market capitalization, which was initially launched in 2015 through an initial coin offering (ICO) of its native token.

Notably, the blockchain recently underwent a substantial upgrade known as Dencun, aimed at reducing transaction fees for users on Ethereum-based, Layer-2 platforms.

In the U.S., the investment community is keenly awaiting a decision regarding the approval of an Ethereum ETF, with a crucial deadline approaching in late May for several applications.

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Historically, the Ethereum Foundation's website assured visitors it had never been approached by any regulatory body in a manner that necessitated confidentiality.

This statement, intended to maintain transparency with the public, was conspicuously removed in the same February update that also saw the elimination of the website's warrant canary.

A warrant canary serves as a subtle indicator on a website, signaling that the host has not received any covert requests for information from government entities.

The removal of such a canary typically implies that such a request has been made, without directly acknowledging it.

Interestingly, the Ethereum Foundation previously removed its warrant canary by mistake in 2019, only to reinstate it shortly thereafter.

As the U.S. Securities and Exchange Commission (SEC) deliberates over several Ethereum ETF applications, the sentiment among analysts is turning pessimistic.

Analysts believed the lack of direct communication between the applicants and SEC officials may hinder the approval process for these financial products.

ETH Price Action: At the time of writing, Ethereum was trading at $3,279, down 0.5% over the past 24 hours, as reported by Benzinga Pro.

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