SEC Closes Ethereum Investigation, Affirms ETH as Commodity

The SEC has officially closed its investigation into Ethereum, confirming that ETH sales are not securities transactions. This decision follows a letter from ConsenSys asking the SEC to affirm Ether’s status as a commodity after the May ETF approvals.

Consensys survives the SEC, but the Battle is Still On

ConsenSys, an Ethereum developer, announced the news, celebrating it as a “major win for Ethereum developers, technology providers, and industry participants.” Despite this victory, ConsenSys emphasized that the regulatory battle with the SEC, led by Gary Gensler, is ongoing.

In a letter on June 7, ConsenSys asked the SEC to confirm that the approval of ETH ETFs, based on ETH being a commodity, would result in closing the Ethereum 2.0 investigation. ConsenSys attorney Laura Brookover shared the SEC’s notification letter, marking the end of the investigation with no charges against anyone.

Finally, Ethereum is NOT a Security

ConsenSys emphasized that Ethereum is a global computing platform, not an investment scheme and that Ether (ETH) is a commodity, as confirmed by the CFTC. They also stated that apps using Ethereum for transactions are not securities brokers and are not regulated by the SEC.

Criticism of the SEC’s Overreach

ConsenSys criticized the SEC’s actions as an unlawful power grab, warning that such actions could undermine America’s leadership in the next generation of the internet. They stressed that this could open the door for other countries to lead in developing an economy built on the technological evolution of the internet.

Echoing a similar sentiment Bill Morgan also criticizes the SEC for its inconsistent treatment of cryptocurrencies, highlighting the recent closure of the investigation into Ethereum as its “second free pass,” following the 2018 Hinman speech that stated Ethereum was not a security. He contrasts this with the SEC’s aggressive stance against Ripple (XRP), suggesting that the SEC’s actions are arbitrary and unfair, showing a lack of consistency in its regulatory approach.

Crypto Impact

Soon after this news, Lookonchain noted that a significant whale investor purchased an additional 5,603 ETH ($19.6 million). Since May 30, this investor has withdrawn a total of 16,604 ETH ($59 million) from Binance at an average price of $3,600 each.

While the market is rejoicing the move, the SEC’s statement included standard language that the closure does not necessarily clear the parties involved of all wrongdoing, but the decision is seen as a win for Ethereum and the broader crypto community seeking regulatory clarity.