Breaking: US SEC Ends Investigation into Ethereum 2.0, Says No Further Legal Action Will Be Taken

By Aaron Feuerstein June 20, 2024 In Altcoins, ETF, Ethereum, SEC
Cryptocurrency in Court: US Government's Legal Warfare
Source:AdobeStock
  • The SEC has closed its investigation into Ethereum 2.0, dropping allegations that Ether sales are securities.
  • Consensys argued that recent ETF approvals implied ETH is a commodity, leading to the investigation’s closure.
  • The decision may spark discussions on listing other altcoin ETFs, but Consensys emphasises ongoing challenges in the crypto industry.

In a major breakthrough for the crypto industry, Consensys, a private blockchain software technology company founded by Ethereum co-founder Joseph Lubin, just announced that the US Securities and Exchange Commission (SEC) is dropping its investigation into Ethereum.

Consensys announced, “the Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0”.

Related: Bloomberg Reports Elon Musk Plans To Turn X Into Next Venmo, Will Crypto Play a Role?

This includes dropping allegations that sales of Ether are securities – a long-debated question among the crypto community.

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Lubin’s company said this comes after they asked the SEC on 7 June to confirm ETH’s status as a commodity following the recent exchange-traded fund (ETF) decision in the US.

In late May the regulator gave the green light for the listing of Ether ETFs on several US exchanges. The 19b-4 approval signifies that trading on these exchanges now only requires S-1 approval.

A step many saw as a de facto greenlighting of Ethereum as a commodity.

Decision to Spark More Altcoin ETF Talks

The SEC dropping the investigation could lead to more talk about altcoin ETFs being listed. Recently, both Ripple CEO Brad Garlinghouse and Tether co-founder William Quigley voiced their expectations of several other altcoins fund listings in the near future.

Quigley believes ADA (Cardano) and SOL (Solana) could be next for an ETF, while Garlinghouse also believes an XRP ETF is in the cards.

However, Consensys also said in their statement on X that, while great news, the decision to drop the Ethereum investigation is not a miracle cure for all the issues in the crypto industry.

The closing of the Ethereum investigation is momentous, but it’s not a cure-all for the many blockchain developers, technology providers, and industry participants who have suffered under SEC’s unlawful and aggressive crypto enforcement regime.

Consensys

The statement added that Consensys would continue the fight, especially regarding the status of crypto wallet MetaMask and swaps and staking within the wallet.

Background of SEC Investigation

The SEC’s Enforcement Division, led by Gurbir Grewal, initiated an investigation in March 2023 into Ethereum transactions dating back to 2018.

The probe came to light when the Ethereum Foundation’s GitHub mentioned scrutiny from a “state authority,” later identified as the SEC.

Related: Bitcoin NFTs Surpass Ronin with Record $148 Million All-Time Sales in Last 30 Days

In April, Consensys sued the SEC, seeking confirmation that ETH is not a security. The SEC decided to close the investigation after Consensys argued that the approval of spot Ethereum ETFs indicated that ETH is a commodity, not a security.

Aaron Feuerstein
Author

Aaron Feuerstein

Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.

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