Ethereum emerges victorious: SEC drops fees on landmark decision
TLDR
The US SEC has closed its investigation into Ethereum 2.0 without filing charges, according to Consensys. The decision comes after Consensys sent a letter to the SEC seeking confirmation that its seizure of Ether ETF approvals means the end of its investigation. The settlement filed suit against the SEC in April challenging the agency's classification of Ether as a security. The closure of the investigation caused the price of Ethereum to increase by 3%. The decision sets a precedent for the treatment of digital assets under US securities law and simplifies the regulatory environment for cryptocurrencies.
The US Securities and Exchange Commission (SEC) has closed its investigation into Ethereum 2.0 without filing charges. The decision announced by blockchain company Consensys comes as a relief to the Ethereum community and could have broader implications for the regulation of digital assets in the United States.
Ethereum survived the second.
Today we are pleased to announce a major victory for Ethereum developers, technology providers and industry participants: The SEC's enforcement division has announced the closure of its investigation into Ethereum 2.0.
This means the SEC…
— Consensus (@Consensys) June 19, 2024
The SEC's investigation into Ethereum 2.0 began in March 2023, following the network's transition to a proof-of-stake agreement system, focusing on individuals and entities buying and selling ether.
Consensys, the company behind the popular MetaMask Ethereum wallet, received a well notice from the SEC in April, indicating the agency's intention to take enforcement action.
In response, Consensys filed a lawsuit against the SEC challenging the agency's classification of Ether as a security. The company does not own Ether securities and the SEC has previously said that Ether is not in its jurisdiction.
On June 7, 2024, Consensus sent a letter to the SEC, confirming that the approval of spot ether exchange-traded funds (ETFs) in May means the investigation into Ethereum 2.0 is over. The approval of these ETFs is based on the premise that Ether tokens are commodities.
The SEC's Division of Enforcement responded on June 18, 2024, informing Consensys that it had completed its investigation and did not intend to recommend enforcement action.
Although the SEC emphasized that the closure of the investigation should not be seen as fraud, the decision is a major victory for Ethereum and the broader cryptocurrency industry.
Following the announcement, the price of Ethereum (ETH) increased by approximately 3%, reaching $3,500.
The decision also had a positive impact on other coins closely tied to Ethereum, such as Lido DAO's government token (LDO), Ethereum Name Service (ENS) and Maker (MKR).
Closing the SEC investigation without executive action sets the precedent for the handling of digital assets under US securities law. It could ease the regulatory environment for cryptocurrencies, which have faced increased scrutiny from the SEC in recent years.
However, some industry experts, such as Coinbase Chief Legal Officer Paul Grewal, argue that the decision does not address the broader issues facing the cryptocurrency ecosystem.
cool. To begin with, accountability was a silly theory.
But what about ecology? What about promotional statements? What about the efforts of others?
How do you explain this decision and other projects damaged by the SEC's analysis of Hawaii?
— paulgrewal.eth (@iampaulgrewal) June 19, 2024
The SEC has been using the Hawaii test to determine whether an asset qualifies as a security, a practice that has drawn criticism from various stakeholders that the test is outdated and inappropriate for cryptocurrencies.
