The Ethereum Foundation Under Investigation by ‘State Authority’

The Ethereum Foundation, the Swiss non-profit organization central to the Ethereum ecosystem, is reportedly under investigation by an undisclosed “state authority,” as per information found on the group’s GitHub repository.

Details regarding the scope and focus of the investigation remain unclear as of the latest update. According to a GitHub commit dated Feb. 26, 2024, the Ethereum Foundation stated, “we have received a voluntary enquiry from a state authority that included a requirement for confidentiality.”

At the time of reporting, the Ethereum Foundation has not responded to requests for comment on the matter.

This development comes amidst a period of technological evolution for Ethereum. As the second-largest blockchain by market capitalization after Bitcoin, Ethereum recently underwent a significant technical upgrade known as Dencun. The upgrade aims to reduce transaction costs for users of Ethereum-based layer-2 platforms.

Meanwhile, in the United States, investors are awaiting a decision on the potential approval of an Ether ETF, with a final deadline set for certain applications in late May.

Previously, the Ethereum Foundation’s website contained a disclosure stating that it had never been contacted by any agency in a manner requiring non-disclosure. However, this disclosure was removed from the website’s GitHub repository on Feb. 26, along with the warrant canary.

A warrant canary is typically a form of warning included on websites to indicate that the organization has not received any secret government subpoenas or document requests. Its removal may suggest that such a request has been received.

Possible reasons for the investigation include speculation that a Swiss regulator may have issued a document request to the Ethereum Foundation, possibly in collaboration with the U.S. Securities and Exchange Commission (SEC). Additionally, there are indications that other overseas entities may also be under scrutiny.

Analysts tracking the situation note that any activity by regulatory bodies may be related to the looming May 23 deadline facing the SEC, which is evaluating multiple applications for an Ether ETF. However, there is growing skepticism regarding the approval of these applications due to perceived lack of engagement between applicants and SEC officials.