NY AG Pushed SEC Hard to Label Ethereum a Security, Bombshell Docs Reveal

Hold onto your hats, crypto fans! Explosive new documents just dropped, showing the New York Attorney General was dead set on getting the SEC to call Ethereum a full-blown security.

This drama unfolded during the SEC's intense 2023 crackdown on the KuCoin exchange. But in a twist, the SEC totally ghosted on making that call public.

Thanks to Coinbase playing detective with a Freedom of Information Act request, we've got our hands on an email hot off the press from Shamiso Maswoswe, the big boss at the NYAG’s Investor Protection Bureau. She fired off this message straight to SEC Chair Gary Gensler's right-hand person.

Maswoswe was straight-up begging the SEC to throw their weight behind an amicus brief, arguing that Ethereum (ETH) should be treated as a security. She knew it wouldn't change New York's game plan, since they can chase both securities and commodities, but she was all about getting a court to back her up on this for the sake of the investors.

But guess what? The SEC totally no-showed on that brief, leaving ETH hanging in regulatory limbo.

Remember, the SEC used to hint that Ether was more of a commodity. But after Ethereum flipped the script to proof-of-stake, the gossip mill went wild wondering if it should be slapped with securities laws. And yet, the SEC's still playing coy about officially classifying ETH as a security.

KuCoin Settlement: The Aftermath

Fast forward to December 2023, and KuCoin coughed up a whopping $22 million to settle things, plus they had to pack up and leave New York for good. Attorney General Letitia James was loud and clear that this was just the beginning of cracking down on rogue crypto platforms.

And thanks to Coinbase's FOIA sleuthing, we're also getting a peek behind the curtain at the SEC's internal chatter on other digital asset classifications, like Ripple's XRP, and where they draw the line between centralized and decentralized blockchain projects.

Coinbase isn't stopping there. They're on a mission, dropping more FOIA documents to shine a light on the murky world of crypto regulation.