There are rumors that the Ethereum Foundation, which is investigating, is sending traders to P…
NOIDA (CoinChapter.com) — Confusion reigned in Ethereum circles after news spread that the Ethereum Foundation was being investigated by the ‘Etheruem Foundation’.State authorities.‘
When this news spread, the price of ETH plummeted 6.4% in a few hours. However, it turns out that all of this is more about misinformation promoting FUD than actual legal action against the world’s second largest cryptocurrency.
What happened?
CoinDesk first reported the ‘allegations’.confidential investigationA national authority named ‘ opposed the Ethereum Foundation against the Ethereum Foundation. The report cited the Ethereum Foundation’s GitHub repository and noted some changes to the foundation’s website.
Pablo Pettinari, a freelance Ethereum front-end developer, deleted text that implied the foundation was under investigation by some government agency. The text that Pettinari removed was a disclaimer that no government agency had secret contact with the foundation.
Pettinari noted that the removal occurred for the following reasons:We received unsolicited inquiries from state authorities that included confidentiality requirements..”
Soon after, Fortune reported that several U.S. cryptocurrency companies had received subpoenas from the Securities and Exchange Commission. The report claimed that the regulatory watchdog has launched a campaign to classify Ethereum’s Ethereum tokens as securities.
As expected, the news that the Ethereum Foundation is under investigation by state authorities caused quite a stir in the markets, with many people sharing their own interpretations of the events on social media. The first thought that comes to investors’ minds is probably “Well, the pop goes to ETFs.“
Additionally, financial lawyer Scott Johnsson noted that this move is likely related to the upcoming approval of a spot ETH ETF. Moreover, a cryptocurrency trader with the username ”Huss‘ speculated that the SEC may be looking for reasons to reject applications for a spot ETH ETF.
The Ethereum Foundation under investigation may be old news.
Adam Cochran, founder of Cinneamhain Ventures and cryptocurrency trader, argued that catchy headlines are nothing more than clickbait. Cochran noted that the Ethereum Foundation is not under any investigation.
Cochran also noted an update from Fortune that the Ethereum Foundation is investigating. The trader claimed that the news was merely a confirmation of Gary Gensler’s campaign against all things cryptocurrency.
Additionally, the ETH token dump due to FUD had little to no impact on the tokens. Although it initially slumped, ETH price recovered as buyers entered the market to buy the dip.
Price action suggests the possibility of price manipulation. Rumors of an SEC investigation drive prices down and drive FUD-driven selling, and then participants absorb the selling pressure by buying additional supply to fill their coffers.
If true, this incident would add weight to the SEC’s argument that cryptocurrencies are prone to manipulation.