Bitrabo Editorial
The US Securities and Exchange Commission (SEC) has decided not to take any enforcement actions following its investigation into Ethereum 2.0. This development is seen as a positive outcome for Ethereum and could have a significant impact on the treatment of digital assets within US securities law.
Ethereum’s Classification as Not a Security
In 2018, the SEC clarified that Ether was not considered a security. However, with the progress of Ethereum to Ethereum 2.0 by 2023, the SEC revisited this stance which led to uncertainty in the Ethereum community. This uncertainty led Consensys to file a lawsuit on April 25, 2024. The lawsuit aimed to establish ETH as a commodity rather than a security, arguing against the SEC’s jurisdiction over its trade and governance.
Consensys urged the SEC to consider the approvals of Ethereum-based ETFs in May 2024, which were based on ETH being classified as a commodity. This was to signal the end of the SEC’s investigation into Ethereum 2.0.
The SEC officially responded on June 18, 2024, stating in a letter to Consensys that they have concluded the investigation and do not intend to recommend any enforcement action by the Commission based on the information available to date.
Although the SEC emphasized that this closure does not mean exoneration or preclude future actions, Laura Brookover from Consensys noted the significance of this development.
The closure of this investigation without any enforcement action could influence how other cryptocurrencies are regulated. It may potentially lead to a more favorable regulatory environment for digital assets overall.
Consensys and the crypto industry are now looking for further clarity on regulatory policies. Consensys also seeks a federal court ruling on their operations to affirm that they do not act as brokers or issue securities through their platforms like MetaMask Swaps and Staking.
The price of Ether (ETH) responded positively to the SEC’s decision, experiencing a 3.3% increase and reaching a trading price of $3,561.