thecoinrise.com
A huge development was announced by Ethereum developer Consensys via a post on social media platform X, confirming that the United States Securities and Exchange Commission (SEC) decided to close its investigation into whether Ether (ETH) is a security.
Consensys highlighted that the SEC’s Enforcement Division has officially notified them of the decision to end the investigation into Ethereum 2.0. This decision implies that the SEC will not pursue charges alleging that the sales of ETH constitute securities transactions. Consensys hailed this outcome as a “major win for Ethereum developers, technology providers, and industry participants.”
SEC Drops Investigation
The decision from the SEC follows a letter sent by Consensys to the agency on June 7, requesting the termination of the investigation into Ether. This request came after the agency approved spot Ether exchange-traded funds (ETFs) in May, an approval that Consensys argued was based on ETH being classified as a commodity.
Consensys senior counsel Laura Brookover shared the SEC’s response, which stated that the agency does not “intend to recommend an enforcement action.” The SEC did not immediately respond to requests for further comment.
Series of Events Led to the SEC Dropping the Probe
The backdrop to this decision includes a series of events earlier this year. In March, Fortune reported that the SEC had issued subpoenas to multiple companies in an attempt to label ETH as a security. This was followed by Consensys suing the agency in April, shortly after receiving a Wells notice from the agency, which warned that its MetaMask crypto wallet might have violated securities laws.
A Pivotal Moment
The lawsuit, which is still ongoing, claimed that the SEC and its Chair Gary Gensler considered ETH to be a security since early 2023. According to Consensys, SEC Division of Enforcement Director Gurbir Grewal approved a formal investigation into Ether’s status as a security on March 28, 2023.
This decision by the SEC to drop the investigation marks a pivotal moment for Ethereum and the broader cryptocurrency industry, providing greater regulatory clarity and alleviating concerns about potential securities-related charges for ETH transactions.