Consensys Software Inc. celebrated a significant victory for the blockchain industry today, announcing that the U.S. Securities and Exchange Commission’s (SEC) enforcement division is closing its investigation into Ethereum 2.0. Consensys described this development as a “major win” for the entire sector, proclaiming in an X post, “Ethereum survives the SEC.” The company emphasized that the SEC will not pursue charges alleging that sales of ETH are securities transactions.

A Major Win for Ethereum and the Blockchain Industry

In a detailed X thread, Consensys explained that the SEC’s decision came in response to a letter sent on June 7. This letter requested confirmation that the approval of spot ether exchange-traded funds (ETFs) in May would lead to the end of the investigation into Ethereum 2.0. Consensys highlighted that the approval of these spot ETH ETFs, though not yet final, was based on the premise that ETH tokens were considered commodities.

The blockchain development company, which is also behind the MetaMask Ethereum wallet, had previously filed a lawsuit against the SEC in April. This lawsuit challenged the agency’s categorization of ether as a financial security. The complaint alleged that SEC’s Gurbir Grewal, Director of the Division of Enforcement, had approved the investigation into Ethereum 2.0 on March 28, 2023, to scrutinize individuals and entities involved in buying and selling ether. Consensys claimed to have received a Wells notice from the SEC in April, indicating the agency’s intent to bring an enforcement action against it.

Despite SEC Chair Gary Gensler avoiding a direct stance on whether ether is a security, Commodity Futures Trading Commission Chair Rostin Behnam has classified ether as a commodity. This divergence in classification has fueled ongoing debates within the regulatory landscape. Consensys remains vigilant in its efforts to ensure that ether is not misclassified, thereby avoiding unnecessary regulatory burdens.

“Our fight continues,” Consensys asserted. “In our lawsuit, we also seek a declaration that offering the user interface software MetaMask Swaps and Staking does not violate securities laws.” The SEC has not yet responded to The Block’s request for comment, leaving the industry awaiting further developments in this ongoing regulatory saga.

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Filed under: News - @ June 19, 2024 4:10 am