According to Eleanor Terrett, in 2023 the New York State Attorney General (NYAG) urged the SEC to file an amicus brief in its case against KuCoin, explicitly arguing that Ethereum (ETH) should be classified as a security (source: Eleanor Terrett on Twitter, May 7, 2025). The NYAG communicated with SEC Chair Gary Gensler’s Chief of Staff, emphasizing that a court ruling designating Ether as a security would be 'beneficial to investor protection.' This move signals increased regulatory scrutiny for ETH, raising concerns about potential enforcement actions and compliance obligations for U.S.-based exchanges and DeFi protocols handling Ether. Traders should closely monitor regulatory developments, as a security classification could impact ETH liquidity, exchange listings, and broader crypto market sentiment (source: Eleanor Terrett on Twitter).