The New York Attorney General asked the U.S. Securities and Exchange Commission to openly declare that Ethaliam’s ether (ETH) is security rather than a product, according to documents revealed in the Agency Communications trobe released Wednesday by Coinbase during the prosecution of the state’s Cucoin in 2023.
Shamiso Maswoswe, chief of the New York AG Investor Protection Bureau, hoped that a brief filing of ETH’s views would make federal guards heavy during court disputes, according to a document prepared through Coinbase’s Freedom Act request filed with the SEC.
“We would like to request that the SEC submit amicus in support of the argument that ether is security,” she wrote in the request. “In our case, whether it’s negative (we have authority over both securities and goods) — but I think it’s beneficial for investors to keep in court that ether is security.”
Messages sent and received within the SEC were made available Wednesday as Coinbase has opened online access to more documents obtained in a legal dispute with federal authorities. The company’s previous release of its documents included a series of letters from federal deposit insurers that backed up industry competitors that U.S. bank regulators actively pressured banks to maintain distance from the crypto.
New York’s 2023 request didn’t get what was requested as the SEC left the agency’s ETH views primarily locked in. US agencies had early views that ETH is likely a commodity. It then seemed shaking after the protocol moved to a consensus mechanism of proof, but the SEC ultimately fell into a stance that implies ETH.
Read more: New York State Attorney General claims that Ether is the security of the Kucoin litigation
Wrestling over such a definition of jurisdiction is at the heart of a long-standing controversy with US regulators in the crypto industry. This eases President Donald Trump’s decision to set a code-friendly tone in his administration, including the choice of new SEC chairman Paul Atkins. The agency is steadily publishing statements on aspects of the digital asset sector that it considers outside the securities realm.
In New York, the Financial Services Bureau was less important as it regulates both securities and goods under one roof, unlike the federal oversight regime, which is divided between the SEC and the Commodity Futures Trade Commission.
In December 2023, New York secured a $22 million settlement with Kucoin because it failed to register as a state exchange. There, state Attorney General Leticia James said he would “continue to take action against companies that ignore the law and risk New Yorkers’ savings and investments.”
Read more: Kucoin leaves New York to settle state lawsuits to pay $22 million
Other SEC communications show continuous interest in the US surveillance gap for crypto assets classification and digital assets.
One email revealed that they were thinking about Ripple and XRP in 2021, and whether the blockchain is centralized or decentralized. The SEC began a long legal battle with Ripple the year before, accusing them of illegally operating in the United States, but the case recently ended courtesy of Ripple.
