World’s Second Most Valuable Cryptocurrency Under Regulatory Scrutiny

Securities, commodities officials examine whether ether, other cryptocurrencies should be regulated

As bitcoin has emerged from the underground world of nerds and criminals to become a mainstream investment, the risk of hacks and scandals has also blossomed. What's a government to do? The WSJ's Steven Russolillo travels the world (sort of) to see how regulators are responding to the remarkable rise of cryptocurrencies. Video: Sharon Shi and Crystal Tai

Dave Michaels and

Paul Vigna

May 1, 2018 5:30 a.m. ET

Bitcoin has largely escaped government oversight, but regulators are examining whether other widely traded cryptocurrencies should be regulated as securities, according to people familiar with the matter.

The inquiry includes a focus on ether, representing a significant threat to virtual currencies, which so far haven’t been drawn into a regulatory crackdown on potential fraud in the market for the assets. Until now, regulators hadn’t questioned whether rules designed for stocks should apply to virtual currencies such as ether,...