The US Securities and Exchange Commission (SEC) has made a significant decision regarding Ethereum (ETH), stating that it will not investigate whether ETH qualifies as a security. This news comes after Consensys, an Ethereum developer, announced on June 19 that the SEC’s Enforcement Division has officially closed its investigation into Ethereum 2.0.
Consensys described the SEC’s decision as a major victory for developers, technology providers, and industry stakeholders in the Ethereum ecosystem. The SEC’s move follows a letter from Consensys sent on June 7, seeking confirmation that the investigation into Ether had been closed. This development comes after the SEC approved spot Ether exchange-traded funds (ETFs) in May, with Consensys arguing that these ETFs are based on ETH being recognized as a commodity rather than a security.
Laura Brookover, Consensys’ senior counsel, shared the SEC’s response letter, confirming that the agency does not “intend to recommend an enforcement action.” Despite the SEC closing its probe into Ethereum 2.0, Consensys’ lawsuit against the SEC remains active. The lawsuit alleges that the SEC had been treating ETH as a security since at least 2023, highlighting tensions between the regulatory body and the crypto industry.
In related news, the SEC has rejected Ripple’s request for a reduced penalty, arguing that it would be inadequate. The decision regarding Ethereum’s status as a security marks a significant development in the crypto industry, with implications for the future regulation of digital assets.
