Today, June 19, 2024, Blockchain firm Consensys announced in a post on X that the U.S. Securities and Exchange Commission (SEC) had closed its investigation into Ethereum 2.0, marking it a significant milestone for the second-largest cryptocurrency by market capitalization.
According to Consensys, the SEC’s decision means the agency will not pursue charges alleging that sales of ETH constitute securities transactions.
ETHEREUM SURVIVES THE SEC.
Today we’re happy to announce a major win for Ethereum developers, technology providers, and industry participants: the Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0.
This means that the SEC…
— Consensys (@Consensys) June 19, 2024
The SEC’s investigation into Ethereum focused on whether the cryptocurrency should be classified as a security. This scrutiny stemmed from Ethereum’s initial coin offering (ICO) in 2014, a fundraising method often compared to securities offerings and therefore requiring SEC compliance.
In March 2024, the SEC issued a series of subpoenas to several companies to classify ETH as a security. In response, Consensys filed a lawsuit against the SEC, challenging what it described as the agency’s illegal attempt to expand its constitutional authority to include oversight of Ethereum.
The blockchain developer argued that the SEC had wrongly labelled ETH as a security and adopted a “reckless approach” that could stifle innovation if left unchecked.
The 34-page legal document, published on April 25, contended that the SEC’s aggressive enforcement actions could undermine Congress’s progress on stablecoin policy and drive technological advancements outside U.S. borders.
Meanwhile, the blockchain firm noted in its recent announcement that it wrote a letter to the regulator earlier in June 2024, inquiring about the status of the investigation following the approval of Ethereum ETFs in late May.
Laura Brookover, senior counsel at Consensys, revealed that the SEC recently responded to its letter stating that it does not “intend to recommend an enforcement action.”
While this outcome marks a positive development for Ethereum, Consensys continues to push for regulatory clarity. The blockchain firm is now seeking a declaration from the SEC that offering user interface software such as MetaMask Swaps and Staking does not violate securities laws.
Notably, the SEC has not yet provided further comments on the matter.
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