The U.S. Securities and Exchange Commission (SEC) has closed its investigation into Ethereum 2.0, a decision that Consensys, the blockchain company behind the MetaMask Ethereum wallet, has described as a “major win” for the cryptocurrency industry.
Consensys Wins SEC Battle
According to Consensys, the SEC’s enforcement division has notified the company that the agency is closing its investigation into Ethereum 2.0. This development came after Consensys sent a letter on June 7th requesting the SEC to confirm that the recent approval of spot ether exchange-traded funds (ETFs) meant the end of the investigation.
The Approval of Spot ETH ETFs
The approval of spot ether ETFs, though not yet finalized, was based on the premise that ETH tokens were commodities, rather than securities. This decision by the SEC is seen as a significant step in the ongoing debate over the classification of ether.
Consensys’ Lawsuit Against the SEC
Consensys had previously filed a lawsuit against the SEC, challenging the agency’s categorization of ether as a financial security. The company alleged that the SEC’s Gurbir Grewal, Director of the Division of Enforcement, had approved the investigation into Ethereum 2.0 on March 28, 2023, to examine individuals and entities buying and selling ether.
“Ethereum survives the SEC,” Consensys wrote in its X post. “This means that the SEC will not bring charges alleging that sales of ETH are securities transactions.”
ETHEREUM SURVIVES THE SEC.
Today we’re happy to announce a major win for Ethereum developers, technology providers, and industry participants: the Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0.
This means that the SEC…
— Consensys (@Consensys) June 19, 2024
Continued Legal Efforts
While the SEC’s decision to close the investigation is a victory for Consensys and the broader cryptocurrency industry, the company stated that its “fight continues.” Consensys is still seeking a declaration that offering the user interface software MetaMask Swaps and Staking does not violate securities laws.
Regulatory Uncertainty Remains
The classification of cryptocurrencies, particularly ether, has been a contentious issue in the regulatory landscape. While SEC Chair Gary Gensler has avoided directly addressing the question of whether ether is a security, Commodity Futures Trading Commission Chair Rostin Behnam has categorized ether as a commodity.
This latest development in the Ethereum 2.0 investigation closure is a significant win for the crypto industry, as it provides some clarity and legitimacy to the Ethereum ecosystem. However, the regulatory landscape remains uncertain, and ongoing legal battles and policy debates are likely to continue shaping the future of the cryptocurrency market.
