The US Securities and Exchange Commission (SEC) has concluded its investigation into whether Ethereum’s Ether token qualifies as a security, as reported by Ethereum developer Consensys.
On June 19, Consensys shared via an X post: "The SEC’s Enforcement Division has informed us that it is closing its investigation into Ethereum 2.0.” This decision implies that the SEC will not be pursuing charges that claim ETH sales are securities transactions. Consensys hailed this outcome as a significant win for Ethereum’s developers, technology, and the broader industry.
Background and Context
Last month, the SEC approved Ethereum spot ETFs, prompting Consensys to query the implications for the ongoing investigation. Consensys argued that these ETFs were based on ETH being classified as a commodity, not a security.
SEC's Response and Legal Implications
Consensys attorney Laura Brookover posted the SEC’s official response and a detailed company statement on X. She noted the rapid changes since the lawsuit was filed against the SEC in late April, culminating in the closure of the investigation after over a year, without any charges.
However, the SEC's letter did not definitively classify Ethereum, using cautious legal language to indicate that ending the investigation did not equate to agreement with Consensys' stance.
Consensys' Legal Challenge and Future Actions
In April, Consensys filed a lawsuit against the SEC, accusing the regulator of excessive attempts to control the cryptocurrency sector, particularly targeting Ethereum as a security. The lawsuit contended that the SEC had internally decided to label Ethereum a security a year prior.
Consensys also disputed the SEC’s authority, emphasizing that the regulator can only oversee securities and had previously stated that Ether did not fall under this category. This lawsuit followed the SEC’s warning that Consensys’ MetaMask wallet might be violating securities laws.
In its statement on June 19, Consensys reaffirmed its opposition to the SEC’s actions concerning MetaMask and expressed its intention to continue challenging the SEC on this matter.
Market Reaction
Following the news, Ethereum's price saw an uptick, trading above $3,500, reflecting a nearly 3.5% increase over the past 24 hours.
