Haider Jamal

Jun 19, 2024

Ethereum 2.0 Investigation To Be Formally Dropped By The SEC

The United States Securities and Exchange Commission (SEC) has concluded its inquiry into Ethereum 2.0 and will no longer pursue legal action alleging that ETH sales constitute securities transactions, according to a recent announcement by Consensys.


Ether Picks Up Huge Win

The aforementioned development is certainly a significant victory for Ethereum developers, technology providers, and industry participants. Consensys described it as a huge step in the right direction for Ethereum developers and businesses, eliminating uncertainty that could have otherwise hindered growth and stifled innovation.

In March, an update on the Ethereum Foundation GitHub repository revealed that the organization was under investigation by an unnamed state authority. After the discovery, Fortune reported that the SEC pursued an energetic legal campaign to classify Ether as a security. Uncertainty intensified after Consensys filed a lawsuit against the SEC in April. Part of the overall goal was to seek a court ruling that would classify ETH as not a security.


Consensys To The Rescue

FOX Business reported in late April that the SEC Enforcement Division, headed by Gurbir Grewal, initiated a formal investigation into the status of Ethereum in March 2023. This investigation, known as Ethereum 2.0, explores transactions and activities associated with Ethereum dating back to 2018.

As noted, the latest decision by the SEC comes after Consensys sent a letter to the SEC arguing that the recent approval of spot Ethereum ETFs implied ETH was not a security, and the SEC should close the investigation. The move likely hinged on considering ETH a commodity, much like Bitcoin (BTC), and signifies no forthcoming legal challenges.

Despite this progress, Consensys said the quest for definitive regulatory guidelines continues, especially concerning services like MetaMask Swaps and Staking. The team is still seeking broader clarity by the SEC on crypto regulations.


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