The U.S. Securities and Exchange Commission (SEC) is ramping up investigations and enforcement actions in the crypto industry. Recently, the SEC has requested public comments on spot Ethereum (ETH) exchange-traded funds (ETFs), indicating a possible crackdown on the second-largest cryptocurrency.

Amidst this, the SEC is investigating the Ethereum Foundation, the non-profit organization behind the Ethereum blockchain. Subpoenas have been issued to companies as part of the probe to determine if Ethereum's shift to a proof-of-stake consensus mechanism qualifies as a security under the Howey test.

Legal experts speculate that the SEC's aim may be to gather evidence to deny approval for a spot ETH ETF. They argue that an ongoing investigation could delay a decision that is in the investors’ best interest.

Critics believe the SEC is going beyond its jurisdiction and hindering innovation, while supporters maintain that strong regulation is essential to safeguard investors and market integrity.

The evolving regulatory landscape has led industry participants to consider relocation to jurisdictions friendlier to crypto. The outcome of the November elections could play a vital role in shaping crypto regulation in the U.S.