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SEC closes investigation into Ethereum as a security

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The Securities and Exchange Commission (SEC) is closing its investigation into Ethereum, the second-largest cryptocurrency by market capitalization, as a security, Consensys confirmed today (Wednesday).

“The SEC’s Enforcement Division has informed us that it is closing its investigation into Ethereum 2.0,” the company tweeted, adding, “This means the SEC will not be filing charges alleging that ETH sales were securities transactions.”

Consensys also confirmed that the decision came after the U.S.-based blockchain company sent a letter to the regulator on June 7, asking it to “confirm that the May ETH ETF approvals, which assumed ETH was a commodity, meant that the agency would close its investigation into Ethereum 2.0.”

A relief for blockchain companies

The status of cryptocurrencies remained unclear and no regulations were proposed for them in the US. Although Bitcoin was considered a commodity, the status of Ether remained uncertain as the SEC was interested in several Ether offerings.

Earlier this year, Consensys, the company behind the popular MetaMask wallet, sued the SEC to stop the regulator from overseeing the Ethereum blockchain. The suit argued that if the SEC continued to exercise its authority over Ethereum, it would bring the blockchain to a standstill and “cripple one of the internet’s greatest innovations.”

The lawsuit came in response to a communication from Wells received by Consensys stating that the regulator was preparing enforcement action against the company over its MetaMask wallet services.

The company argued that MetaMask is not a broker and “neither holds clients’ digital assets nor performs any transaction functions.”

With the SEC confirming the completion of its investigation, companies offering Ethereum-based services can rest assured that they will not face action for unregistered securities offerings.

However, Consensys confirmed that it would continue to pursue the lawsuit as it “seeks a declaration that the offering of the MetaMask Swaps and Staking user interface software does not violate the securities laws.”

The Securities and Exchange Commission (SEC) is closing its investigation into Ethereum, the second-largest cryptocurrency by market capitalization, as a security, Consensys confirmed today (Wednesday).

“The SEC’s Enforcement Division has informed us that it is closing its investigation into Ethereum 2.0,” the company tweeted, adding, “This means the SEC will not be filing charges alleging that ETH sales were securities transactions.”

Consensys also confirmed that the decision came after the U.S.-based blockchain company sent a letter to the regulator on June 7, asking it to “confirm that the May ETH ETF approvals, which assumed ETH was a commodity, meant that the agency would close its investigation into Ethereum 2.0.”

A relief for blockchain companies

The status of cryptocurrencies remained unclear and no regulations were proposed for them in the US. Although Bitcoin was considered a commodity, the status of Ether remained uncertain as the SEC was interested in several Ether offerings.

Earlier this year, Consensys, the company behind the popular MetaMask wallet, sued the SEC to stop the regulator from overseeing the Ethereum blockchain. The suit argued that if the SEC continued to exercise its authority over Ethereum, it would bring the blockchain to a standstill and “cripple one of the internet’s greatest innovations.”

The lawsuit came in response to a communication from Wells received by Consensys stating that the regulator was preparing enforcement action against the company over its MetaMask wallet services.

The company argued that MetaMask is not a broker and “neither holds clients’ digital assets nor performs any transaction functions.”

With the SEC confirming the completion of its investigation, companies offering Ethereum-based services can rest assured that they will not face action for unregistered securities offerings.

However, Consensys confirmed that it would continue to pursue the lawsuit as it “seeks a declaration that the offering of the MetaMask Swaps and Staking user interface software does not violate the securities laws.”

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