Fox Business Journalist Says SEC Has Until 2024 to Penalize Ethereum For Conducting Unregistered ICO

Will the SEC penalize Ethereum for its unregistered ICO? Only time will tell…

With the SEC claiming that all crypto assets except Bitcoin fall under its jurisdiction, Eleanor Terrett, a Fox Business journalist, said the agency has until 2024 to go after Ethereum for its unregistered 2014 ICO. 

According to Terrett, before now, the SEC had a five-year statute of limitations to go after companies believed to have conducted unregistered securities offerings in the United States. 

Based on this, the period when the SEC was supposed to crack down on Ethereum “technically ended” in 2019. 

However, the United States Congress recently granted the Securities and Exchange Commission a 10-year window if it seeks repayment of profits illegally gained through a violation of securities laws. 

Notably, Congress’s 10-year window granted to the SEC has extended the duration to 2024, in which the agency can “legally” charge Ethereum for its unregistered offering. 

“The SEC legally has until 2024 to penalize Ethereum for its unregistered ICO. Will it? Only time will tell,” Terrett said. 

All of this to say that, if it wants to, the SEC legally has until 2024 to penalize Ethereum for its unregistered ICO. Will it? ??‍♀️ Only time will tell.

— Eleanor Terrett (@EleanorTerrett) August 17, 2022

SEC’s Continuous Crack Down of Unregistered ICOs

It is noteworthy that the SEC has been cracking down on crypto-related companies believed to have conducted unregistered ICOs in the U.S. 

This week, the SEC filed a lawsuit against Dragonchain for offering an unregistered Initial Coin Offering in 2016 that saw it raise $16.5 million. 

In the filings, the SEC demands disgorgement of the proceeds gained via the offering and a monetary penalty for breaching U.S. securities law. 

Aside from Dragonchain, in past, the SEC has also charged other top firms, including Ripple and Telegram. 

While other companies opted to settle with the SEC, Ripple stood its ground, maintaining that its 2013 ICO did not breach U.S. securities laws.  

Ripple’s Lawsuit Draws Attention to Ethereum

Ripple’s determination to prove XRP is not a security drew lots of attention to Ethereum, with many wondering why the SEC is yet to charge ETH for the same crime it claimed Ripple committed. 

SEC’s chair Gary Gensler recently said the agency considers only Bitcoin to be out of its jurisdiction. Thus, implying that all altcoins, including ETH, are considered securities. 

SEC’s Staff in Romance With Ethereum

There is a possibility that the SEC may not be charging Ethereum because a number of the SEC’s former staff have been affiliated with the crypto project. 

William Hinman, the former director of SEC’s Corporate Finance, was a partner at Simpson Thatcher before he got the appointment to head the commission’s Corporate Finance division. 

Simpson Thatcher is a member of the Enterprise Ethereum Alliance (EEA), a company dedicated to marketing Ethereum as an enterprise solution. 

Empower Oversight recently uncovered Hinman’s conflict of interest while he was heading the SEC’s Corporation of Finance. 

Per documents shared by Empower Oversight, Hinman had a series of meetings with Simpson Thatcher during his time at the SEC, which ultimately resulted in his 2018 speech, where he declared ETH as a non-security. 

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