SEC Officially Withdraws Investigation into Ethereum 2.0, ConsenSys Developer Announces Good News
Blockchain developer ConsenSys, known for launching the cryptocurrency wallet Metamask (Foxlet), announced yesterday (19th) on its official community X that the U.S. Securities and Exchange Commission (SEC) has notified the company that it will terminate the investigation into Ethereum 2.0.
On May 23rd, the SEC approved the application for an Ethereum spot ETF from eight investment institutions, including BlackRock and Fidelity. The crypto industry widely interprets this action as an “implicit recognition” that Ethereum and similar cryptocurrencies are “not securities.”
Based on this approval, ConsenSys sent a letter to the SEC on June 7th requesting confirmation that the investigation into Ethereum being classified as a security would be terminated given the approval of the Ethereum spot ETF.
According to ConsenSys’ announcement, one of the letters sent by the SEC in response to the company’s legal team stated, “We (SEC) have concluded the investigation into the matter mentioned above. Based on the information we have at present, 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 means that the SEC will no longer accuse them of “offering Ether sales” as securities transactions.
“Ethereum has withstood the regulatory threat from the SEC! This is a significant victory for Ethereum developers, technology providers, and industry professionals!”
Further reading:
Foxlet developer sues SEC! ConsenSys counters with four arguments: “Ether is not a security”
SEC still refuses to positively respond to whether Ethereum is a security
With the withdrawal of the SEC’s investigation into ConsenSys and the preliminary approval of the Ethereum spot 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 Ethereum spot ETF last month, all the application documents and press releases did not explicitly state the non-security status of Ether, completely avoiding the long-standing debate on this issue.
In two letters sent to ConsenSys’ legal team by the SEC on the 19th, one of them stated that although the investigation had ended, it did not mean that the subjects of the investigation were declared innocent or that the SEC would not take any other enforcement actions in the future.
In the second letter, the SEC again used similar wording to emphasize that although the investigation is concluded, it does not mean that they agree with any statements made by ConsenSys’ team in the letter sent to regulatory agencies, meaning it does not endorse ConsenSys’ claim that “after the Ethereum spot ETF is approved, the SEC does not consider Ether as a security.”
As of the time of publication, the SEC has not yet responded to requests for comments from foreign media such as The Block and Coindesk regarding this matter.
The legal battle between ConsenSys and the SEC is still ongoing.
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 actions, 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 takeover” of Ethereum.
Although the SEC’s investigation into Ethereum 2.0 has been terminated, ConsenSys stated in its latest announcement 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.”
Source:
The Block, Coindesk, Cointelegraph
Proofread by: Shao Yuanting