Consensys Software Inc. today announced that the U.S. Securities and Exchange Commission’s Enforcement Division has notified the blockchain company that it is ending its investigation into Ethereum 2.0. It was described as a “significant win” for the industry.
“Ethereum will survive the SEC” ConsenSys wrote In the X post. “This means the SEC will not prosecute ETH sales for claiming they were securities transactions.”
Consensys detailed in its X thread that the SEC’s decision came after the company sent its June 7 letter. The letter asked the agency to confirm that May’s approval of a spot ETC fund means it will end its investigation into Ethereum 2.0. Approval of the spot ETH ETF, although not final, is based on the premise that ETH tokens are a commodity, Consensys wrote.
The blockchain development company behind the MetaMask Ethereum wallet filed a lawsuit against the SEC in April, challenging the agency’s classification of ether as a financial security.
The company claimed in its complaint that Gurbir Grewal, director of the SEC’s Division of Enforcement, authorized an investigation into Ethereum 2.0 on March 28, 2023, to investigate individuals and entities buying and selling ether. Consensys reportedly received a well notice from the SEC in April, meaning the agency plans to take enforcement action against it.
SEC Chairman Gary Gensler declined to comment directly on whether ether is a security, while Commodity Futures Trading Commission Chairman Rostin Behnam classified ether as a commodity.
“Our fight continues,” Consensys said. “In our lawsuit, we are also seeking a declaration that offering the user interface software, MetaMask Swaps and Stake, does not violate securities laws.”
The SEC did not immediately respond to The Block’s request for comment.
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About the author
Danny Park is The Block’s East Asia reporter, writing about topics including Web3 development and cryptocurrency regulation in the region. He previously worked as a reporter for Forkast.News, where he actively covered the fall of Terra-Luna and FTX. Based in Seoul, Danny previously produced written and video content for media companies in Korea, Hong Kong, and China. He holds a Bachelor’s degree in Journalism and Business Marketing from the University of Hong Kong.