The United States Securities and Exchange Commission (SEC) has decided to end its investigation into whether Ether qualifies as a security. Consensys, an Ethereum developer, announced on June 19 that the SEC’s Enforcement Division had informed them of the closure of the Ethereum 2.0 investigation. This means that the SEC will not pursue charges claiming that the sale of ETH constitutes securities transactions. Consensys considers this a significant victory for Ethereum developers, technology providers, and industry participants.
Consensys sent a letter to the SEC on June 7, asking if the investigation into Ether would be terminated, citing the approval of spot Ether exchange-traded funds (ETFs) by the regulator in May. The firm argued that these ETFs were based on the assumption that ETH is a commodity. Consensys senior counsel Laura Brookover shared the SEC’s response letter, which stated that the agency does not intend to recommend any enforcement action.
The SEC spokesperson declined to comment on the presence or absence of an ongoing investigation when approached by Cointelegraph. However, earlier this year, the SEC reportedly issued subpoenas to various companies in connection with efforts to classify ETH as a security.
In April, Consensys filed a lawsuit against the SEC after receiving a Wells notice, which warned that its MetaMask crypto wallet might have violated securities laws. The lawsuit claimed that SEC Chair Gary Gensler and the SEC believed that ETH was a security since early 2023. Consensys alleged that the SEC Division of Enforcement Director Gurbir Grewal approved an official order of investigation into Ether’s status as a security on March 28, 2023. The lawsuit is still ongoing.
Update (June 19, 9:55 pm UTC): The article has been updated with a comment from the SEC.