SEC Officially Withdraws Investigation into “Ethereum 2.0,” Developer ConsenSys Announces Good News
Consensus, the blockchain developer known for launching the cryptocurrency wallet Metamask (the Fox), announced yesterday (19th) on its official community X that the U.S. Securities and Exchange Commission (SEC) has notified the company of the termination of the investigation into Ethereum 2.0.
On May 23rd, the SEC approved the application for a “spot Ether ETF” from eight investment firms, including BlackRock and Fidelity. Many in the cryptocurrency industry believe that this action may represent an “implicit recognition” by the SEC that Ether and similar cryptocurrencies are “not securities.”
Based on this approval, ConsenSys sent a letter to the SEC on July 7th, requesting confirmation that the investigation into Ether as a security would be terminated in light of the approval of the spot Ether ETF.
According to the content published by ConsenSys, one of the letters from the SEC in response to the company’s legal team stated, “We (the SEC) have concluded the investigation into the above matter. Based on the information available to us at this time, we do not intend to recommend that the Commission take any enforcement action against your client Consensys Software Inc.”
Consensys stated that the SEC’s withdrawal of the investigation indicates that the SEC will no longer accuse them of engaging in “securities trading” by offering Ether for sale.
“Ether has survived the SEC’s regulatory threat! This is a significant victory for Ethereum developers, technology providers, and industry professionals!”
Related reading:
Developer of Metamask sues SEC! Consensys counters with four reasons: “Ether is not a security.”
SEC still refuses to respond positively to whether Ethereum is a security.
With the withdrawal of the SEC’s investigation into Consensys and the preliminary approval of the spot Ether ETF, does this mean that U.S. blockchain companies are completely free from regulatory threats and can rest easy?
The situation may not be entirely optimistic.
Even though the SEC approved the spot Ether ETF last month, in all the application documents and press releases, there was no explicit statement regarding Ether’s non-security status, completely avoiding this long-standing debate.
In two letters sent by the SEC to Consensys’ legal team on the 19th, one letter stated that although the investigation had ended, it did not mean that the subject of the investigation was declared innocent or that the SEC would not take other enforcement actions in the future.
In the second letter, the SEC used similar wording again, emphasizing that although the investigation has ended, it does not mean that the SEC agrees with any statements made by Consensys in the letter to regulatory authorities, implying that it does not endorse Consensys’ claim that “after the spot Ether ETF is approved, the SEC does not consider Ether to be a security.”
As of the time of submission, the SEC has not yet responded to requests for comment from external media such as The Block and Coindesk regarding this matter.
The litigation between Consensys and the SEC is still ongoing.
In April of this year, Consensys received a “Wells Notice” from the SEC, accusing its product, the MetaMask wallet, of being an “unregistered securities broker” and taking legal action for violating securities laws.
In response to the SEC’s enforcement action, Consensys quickly filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) at the end of that month (4/26), accusing the SEC of attempting to classify Ether (ETH) as a security, which is an “illegal seizure” of Ethereum.
Even though the SEC’s investigation into Ethereum 2.0 has been terminated, ConsenSys stated in its latest post that the lawsuit is still ongoing.
“Our fight continues. In this lawsuit, we still need the court to declare that the token exchange (Swap) and staking features in the user interface software provided by Consensys, the MetaMask wallet, do not violate securities laws.”
Sources:
The Block, Coindesk, Cointelegraph
Proofread by: Shao Yu-Ting
