SEC Backs Down: Ethereum No Longer Under Investigation

Crypto News Cryptocurrencies

Written by Aaron S.,

Editor-In-Chief

Last Updated: June 20, 2024

Key Takeaways

The SEC ends its probe into whether Ether is a security, as announced by Consensys;
Despite the SEC's decision, Consensys' lawsuit against the agency remains unresolved;
The SEC's stance suggests ETH is not a security, impacting future regulatory perspectives on digital currencies.

Stop overpaying - start transferring money with Ogvio. Sign up, invite friends & grab Rewards now! 🎁

SEC Backs Down: Ethereum No Longer Under Investigation

BITDEGREE IN YOUR SOCIAL FEED

The US Securities and Exchange Commission (SEC) has decided not to investigate whether Ether (ETH) qualifies as a security, according to Ethereum developer Consensys.

Consensys announced on June 19 that the SEC's Enforcement Division has officially closed its investigation into Ethereum 2.0.

"The SEC will not bring charges alleging that sales of ETH are securities transactions," the firm stated, describing the decision as a major victory for developers, technology providers, and industry stakeholders in the Ethereum ecosystem.

What Is a Neobank (And Should You Use It)?

Did you know?

Want to get smarter & wealthier with crypto?

Subscribe - We publish new crypto explainer videos every week!

The SEC's decision followed a letter from Consensys, sent on June 7, asking the agency to confirm if it closed the investigation into Ether. This came in the wake of the SEC's approval of spot Ether exchange-traded funds (ETFs) in May, which Consensys argued are based on ETH being recognized as a commodity rather than a security.

Laura Brookover, Consensys' senior counsel, shared the SEC's response letter, confirming that the agency does not "intend to recommend an enforcement action."

Consensys filed a lawsuit against the SEC in April, shortly after the company received a Wells notice from the agency. The notice suggested that the MetaMask crypto wallet, a product of Consensys, might have been in violation of securities laws.

The lawsuit alleges that SEC Chair Gary Gensler and the Division of Enforcement, led by Director Gurbir Grewal, had been treating ETH as a security since at least 2023. Consensys highlighted that Grewal approved a formal order of investigation into ETH's security status on March 28, 2023.

Despite the SEC closing its probe into Ethereum 2.0, the lawsuit initiated by Consensys remains active, underscoring ongoing tensions between the regulatory body and the crypto industry.

In other news, the SEC has recently rejected Ripple's request for a reduced penalty, arguing it would be inadequate.