SEC Officially Revokes Investigation into Ethereum 2.0, Consensys Celebrates
Consensys, the blockchain developer renowned for launching the cryptocurrency wallet Metamask, announced on its official community, X, yesterday (19th) that the US Securities and Exchange Commission (SEC) has notified the company that it will terminate its investigation into Ethereum 2.0.
On May 23rd, the SEC approved the application for a “spot Ethereum ETF” from eight investment institutions, including BlackRock and Fidelity. This move is widely seen as an “implicit recognition” by the SEC that Ethereum and other similar cryptocurrencies are “not securities”.
Based on this approval, Consensys wrote a letter to the SEC on June 7th, requesting confirmation on whether the investigation into Ethereum as a security would be terminated in light of the approval of the spot Ethereum ETF. According to the contents released by Consensys, one of the letters from the SEC to the company’s legal team stated, “We (the SEC) have concluded the investigation in question. Based on the information we currently have, we do not intend to recommend any enforcement action against your client, Consensys Software Inc.”
Consensys stated that the revocation of the SEC’s investigation means that the SEC will no longer accuse the company of engaging in securities transactions by providing Ethereum sales. They expressed, “Ethereum has survived the SEC’s regulatory threat! This is a major victory for Ethereum developers, technology providers, and industry professionals!”
Further reading:
Consensys Files Lawsuit Against SEC! Four Reasons Why Consensys Argues That Ethereum is Not a Security
SEC Continues to Refuse to Respond Positively to Whether Ethereum is a Security
With the revocation of the SEC’s investigation into Consensys and the preliminary approval of the spot Ethereum ETF, does this mean that American 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 Ethereum spot ETF last month, neither the application documents nor the press releases explicitly stated the non-security status of Ethereum, 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 has ended, it does not mean that the subject of the investigation is declared innocent, nor does it mean that the SEC will not take any future enforcement action.
In the second letter, the SEC used similar wording again, emphasizing that although the investigation has ended, it does not mean agreement with any statements made by Consensys in the letter to the regulatory authorities, meaning it does not endorse Consensys’ claim that “after the spot Ethereum ETF is approved, the SEC does not consider Ethereum a security.”
As of the time of submission, the SEC has not immediately responded to comments from external media such as The Block and Coindesk regarding this matter.
Consensys’ ongoing lawsuit against the SEC continues.
In April of this year, Consensys received a “Wells Notice” from the SEC, accusing its product 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 filed a lawsuit against the US Securities and Exchange Commission (SEC) at the end of that month (4/26), accusing the SEC of attempting to classify Ethereum (ETH) as a security, which they deemed as an “illegal takeover” 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 MetaMask wallet provided by Consensys do not violate securities laws.”
Sources:
The Block, Coindesk, Cointelegraph
Proofread by: Shao Yuanting