SEC Closes Probe into Ethereum 2.0, Consensys Calls It “Major” Win for Crypto and Blockchain Industry

Blockchain and smart contract development firm Consensys has shared an important update via social media, noting that Ethereum (ETH) has “survived” the SEC.

ConenSys confirmed that they are announcing a major win for Ethereum developers, technology providers, and industry participants.

The Division of Enforcement of the US Securities and Exchange Commission (SEC) has notified them that it is closing its investigation into Ethereum 2.0.

This means that the SEC will “not bring charges alleging that sales of ETH are securities transactions.”

This decision may mean that the SEC will no longer consider ETH a security. Under the leadership of Chairman Gary Gensler, the SEC has stated that all digital assets are securities with the exception of Bitcoin.

Consensys also noted that the SEC’s decision came after it sent a letter to the agency on June 7, 2024, requesting if it may end its probe into Ethereum.

Consensys Senior Counsel Laura Brookover shared the regulator’s response letter to the company. It notes that the SEC does not intend to “recommend an enforcement action.”

The SEC has not yet provided any detailed comments regarding this development.

In March of this year, it was revealed that the SEC had sent subpoenas to several firms, apparently related to attempts to qualify Ethereum’s ETH token as a security.

Under a previous administration in 2018, the SEC declared that ETH was not a security. The declaration was made by then Chief of the SEC’s Division of Enforcement Bill Hinman. Some digital asset insiders postulated that once Ethereum shifted from proof of work (PoW) to proof of stake (PoS), this may have opened the door for Hinman’s statement to be challenged.

Consensys filed a lawsuit against the SEC in April of this year. The suit came after the company received a Wells notice from the SEC warning that its MetaMask cryptocurrency wallet could have violated applicable US securities laws.

The suit alleged that the SEC and its Chairman Gary Gensler thought ETH was a security since around 2023.

Consensys asserted that the SEC Division of Enforcement Director Gurbir Grewal approved an order of investigation into Ether’s status as a security in March of last year.

As part of its recent update, it confirmed that the lawsuit is still in process.

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