After it was announced late yesterday that Ethereum 2.0 has closed its investigation, Ethereum has seen a significant increase in the price markets.
Accord filed a lawsuit against the SEC in April. In the complaint, the company alleged that the SEC was “seeking to regulate ETH as a security, despite the fact that ETH does not have the characteristics of a security at all – and despite the fact that the SEC has previously told the world that ETH is not a security, and is not within the SEC's legal jurisdiction,” the 34-page complaint says.
In March, it emerged from the news that the Ethereum Foundation is being investigated by an unnamed “government official”. But that investigation has now been discontinued.
“This means that the SEC will not incur charges that ETH sales are securities transactions,” the Ethereum software company wrote on Twitter last night.
According to CoinGecko, the space's trading volume in the last 24 hours has reached $21 billion. The only time the ETH trading volume was higher in the last month was on May 24, the day after the SEC approved the Ethereum ETF for trading.
ETH isn't the only one that's seen the upheaval.
Many of the coins closely tied to Ethereum, such as Liquidity Recovery Protocol's Lido Dao Management Token (LDO), decentralized domain name service Ethereum Name Service (ENS), and fourth-largest Ethereum developer DeFi Protocol (MKR) all posted double-digit gains. the previous day.
But the SEC's investigation isn't enough to undo the damage the sunset has done to the rest of the industry, Coinbase Chief Legal Officer Paul Grewal argued on Twitter.
“But what about ecology? What about promotional statements? What about other efforts,” he wrote. “How do you explain this decision and other projects damaged by the SEC's analysis of Hawaii?”
The SEC has for years used the so-called Hawaii test to determine whether an asset meets the definition of a security and therefore must be registered with the SEC. But that drew a lot of backlash from SEC Commissioner Hester Peirce, law professors and lawmakers—all of whom argued that it was an outdated and inappropriate test to apply to cryptocurrencies.
Things got even more complicated when SEC Chairman Gary Gensler himself suggested that proof of stock holdings might qualify as securities under the Howey test.
That is why the subject of the SEC investigation is called “Ethereum 2.0”. Ethereum has become a proof-of-stake network since its merger in September 2022, which, like Bitcoin, saw it transition from a proof-of-work to a consensus-of-stake mechanism.
There is a list of properties named in the lawsuits filed by the SEC since then. Analysts have pointed out that proof-of-work is what has kept some coins like Litecoin (LTC) and Dogecoin (DOGE) out of the regulatory crosshairs.
A lawsuit filed against Bittrex in April 2023 alleges that OMG Network (OMG), Dash (DASH), Monolith (TKN), Naga (NGC), Real Estate Protocol (IHT) and Algorand (ALGO) are all securities.
A few months later, the SEC said in its lawsuit against crypto exchange Coinbase that a few assets were unregistered securities, including: Binance's BNB token, the exchange's now defunct stablecoin, BUSD and 10 other tokens: Solana (SOL), Cardano (ADA), Polygon (MATIC ), Filecoin (FIL), Cosmos Hub (ATOM), Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS) and COTI (COTI).
Coin naming on allegations – even before a decision was made on whether the allegations were true, it was enough to delist some of them from crypto trading platforms.
