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Ethereum Foundation Under Investigation by 'State Authority' (coindesk.com) 29

Posted by msmash from the breaking-news dept.
CoinDesk: The Ethereum Foundation -- the Swiss non-profit organization at the heart of the Ethereum ecosystem -- is under investigation by an unnamed "state authority," according to the group's website's GitHub repository. The scope of the investigation and its focus was unknown at press time. According to the GitHub commit dated Feb. 26, 2024, "we have received a voluntary enquiry from a state authority that included a requirement for confidentiality."

The investigation comes during a time of change for Ethereum's technology. Ethereum is the second-largest blockchain by market cap after Bitcoin, launching in 2015 following an initial coin offering for the chain's native ETH token. Earlier this month, the chain underwent a major technical upgrade, dubbed Dencun, designed to bring down transaction costs for users of Ethereum-based layer-2 platforms.
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Ethereum Foundation Under Investigation by 'State Authority' More

Ethereum Foundation Under Investigation by 'State Authority'

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  • cryptocurrency needs regulation to stick around!

  • Back when the Internet first started being used by the unwashed masses, there was a big fear that someone would go setup an Internet point-of-presence and a bunch of servers in some place like "Sealand" or other grey-area "state" that might have a vested interest in allowing piracy and other "violations" of the soon-to-be-law DCMA and other state power grabs. This was even tried from time to time. What happened was that anyone who tried it would end up having their upstream ISP attacked by whatever state or

    • the state can demand you pay your taxes on that Crypto and they don't let you pay taxes with Crypto.

      And if you don't pay up they can lock you up like Al Capone and you may not get an club fed.

      • Re: (Score:3)

        by Luckyo ( 1726890 )

        Same way they can demand you pay taxes on anything without accepting a part of that thing.

        Taxes on your car? No, giving government a bumper isn't going to go through. Your house? No government wouldn't like you have a permanent lease on a room. Etc.

        Money exists for the very reason of establishing a medium of exchange of value, and sovereign actors get to define what that medium is on their sovereign territory.

        • sovereign actors get to define what that medium is on their sovereign territory.

          I believe this is why it would be such a coup to allow individual freedom when it comes to currency. I'm okay with the government specifying what currency they'd like to have taxes paid in, but I'm not okay with legal tender laws which define the only allowable currency. I agree with the crypto nerds that we need competition in the monetary domain. I'm fine with letting crypto currency compete with fiat, 100% gold/silver reserve backed currencies, specie, and anything else someone wants to take as currency.

          • do you want have to fill out an gain / loss statement each time crypto is used? as it moves up and down so much that you need to keep track of gains and losses each day.

            • No absolutely not, but at the same time the SEC has already said that Etherium is a commodity. So, it's be the same tax situation as with any commodity. You don't pay any type of "wealth tax" when the value increases, but you do have to pay capital gains taxes if it increases in value between the time when you buy and sell. If we were under a system of competitive currencies ostensibly you'd only have to hassle with that when you paid your taxes (which is already a hassle).

          • Re: (Score:2)

            by Luckyo ( 1726890 )

            You agreement/disagreement is irrelevant, as you are not a sovereign of a nation.

    • Re: (Score:2)

      by taustin ( 171655 )

      Pirate Bay might disagree with you on how easily such things can be shut down. But it does take a real commitment.

      • Bro, I have a Pirate Bay tee shirt I got pretty close to day-one. They have done an impressive job of staying afloat, but it sure as heck has not been easy. I cannot remember all the times they've been shut down and needed to relocate. However, it's a good counterfactual. The only thing is, what if Pirate Bay was the only exchange you could use to get your crypto turned back into usable money? Then I think people would be thinking "Well, yeah, they've come back through a lot of resistance but how much longe

  • we have received a voluntary enquiry from a state authority that included a requirement for confidentiality.

    How can something that is "voluntary" come with a requirement for... well... anything?

    • Re: (Score:2)

      by gweihir ( 88907 )

      "Voluntary" here means that they ask nicely first. If that does not work, they get a lot less friendly. The Swiss financial laws allow to make this both voluntary and come with a secrecy requirement that must be followed.

      • So basically: "Well... that's a nice looking crypto exchange you've got there. It's be a shame is something were to happen to it." That's not asking nicely. That's extortion. Add in the star chamber style secrecy aspect to whatever this accusation is about and it's extra-double-super loathsome. When did Switzerland become that sort of tin-pot authoritarian police state?

        • Re: (Score:2)

          by gweihir ( 88907 )

          Nope. That is more civilized law enforcement than you are used to expect. Also note that this goes against an _organization_, not a person, hence the secrecy requirement is perfectly valid. They are still able to talk to their lawyers or to experts about it, they just have to put these people under NDA. This is not like a NSL or a FISA court ruling.

          It goes like this:
          1. First they ask nicely. As the subjects they ask about are confidential, they put a confidentiality requirement on it and you are free to re

  • The Swiss financial regulatory body. If they find ETH is a security, then the foundation will face rather strong regulation. It should also be mentioned that the Swiss style is to first ask friendly questions and only if these do not get satisfactory answers to start kicking in doors.

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