Ethereum Cleared by SEC, Investigation Closed Permanently

Ethereum Cleared by SEC, Investigation Closed Permanently

The United States Securities and Exchange Commission (SEC) has officially concluded its investigation into Ethereum, deciding not to pursue any charges alleging that sales of ETH are securities transactions. This decision marks a significant milestone for Ethereum, the second-largest cryptocurrency globally.

The closure of the investigation follows a letter from Ethereum developer ConsenSys, which asked the SEC to confirm Ether’s status as a commodity in light of the May approval of Ethereum exchange-traded funds (ETFs). ConsenSys announced the news, stating that the SEC’s Enforcement Division has notified them that the investigation into Ethereum 2.0 has been closed permanently. This means the SEC will no longer bring any charges against Ethereum regarding its status as a security.

ConsenSys celebrated the news on social media, describing it as a “major win for Ethereum developers, technology providers, and industry participants.” However, they also highlighted that the broader regulatory fight with the SEC continues. In a statement, ConsenSys emphasized that regulatory clarity should not require litigation and expressed their commitment to ongoing advocacy.

The decision came after ConsenSys sent a letter on June 7 seeking confirmation that the approval of ETH ETFs, which was based on ETH being classified as a commodity, would result in the closure of the Ethereum 2.0 investigation. Laura Brookover, a ConsenSys attorney, shared the SEC’s notification letter, noting the rapid developments since their lawsuit against the SEC filed in late April.

The SEC’s notification indicated that while they do not agree with all the factual statements or legal conclusions in ConsenSys’ letter, they do not intend to recommend an enforcement action against ConsenSys Software Inc. regarding this investigation. The SEC emphasized that this notice should not be construed as an exoneration.

ConsenSys reiterated that Ethereum is a global computing platform and not an investment scheme, asserting that Ether (ETH) is a commodity, as confirmed by the Commodity Futures Trading Commission (CFTC). They also stated that applications allowing independent transactions using Ethereum are not securities brokers and should not be regulated by the SEC.

ConsenSys criticized the SEC’s previous actions, describing them as an unlawful power grab that could jeopardize America’s leadership in the next generation of internet technologies. They warned that such regulatory overreach could enable other countries, including adversarial nations, to dominate the development of an internet-based economy.

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