News
The SEC is closing its investigation into Ethereum as a security
The Securities and Exchange Commission (SEC) is closing its investigation into Ethereum, the second-largest cryptocurrency by market capitalization, as a stock, Consensys confirmed today (Wednesday).
“The SEC Enforcement Division has notified us that it is closing its investigation into Ethereum 2.0,” the company said in a tweet, adding: “This means that SEC will not charge that ETH sales are securities transactions.”
Consensys further confirmed that the decision came after the US-based blockchain company sent a letter to the regulator on June 7 asking to “confirm that the May ETH ETF approvals, which were based on ETH being a commodity, meant the agency would shut down its Ethereum Investigation 2.0.”
A relief for Blockchain companies
The status of cryptocurrencies remains unclear, and no regulation has been proposed for them in the United States. Although Bitcoin is considered a commodity, Ether’s status has remained uncertain due to the SEC’s interest in several Ether offerings.
Earlier this year, Consensys, the company behind the popular MetaMask portfolio, sued the SEC to dissuade the regulator from overseeing the Ethereum blockchain. The lawsuit argued that if the SEC continued to exercise its authority over Ethereum, the blockchain would grind to a halt, “crippling one of the internet’s greatest innovations.”
The lawsuit came in response to a notice Wells received from Consensys indicating that the regulator was preparing to take enforcement action against the company over its MetaMask portfolio services.
The company supported it MetaMask is not a broker and “does not hold clients’ digital assets or perform any transaction functions.”
With the SEC confirming the closure of its investigation, companies offering Ethereum-based services can be relieved that they will not face action over unregistered securities offerings.
However, Consensys confirmed that it will pursue the lawsuit as it is seeking “a declaration that the MetaMask Swaps and Staking UI software offering does not violate securities laws.”
The Securities and Exchange Commission (SEC) is closing its investigation into Ethereum, the second-largest cryptocurrency by market capitalization, as a stock, Consensys confirmed today (Wednesday).
“The SEC Enforcement Division has notified us that it is closing its investigation into Ethereum 2.0,” the company said in a tweet, adding: “This means that SEC will not charge that ETH sales are securities transactions.”
Consensys further confirmed that the decision came after the US-based blockchain company sent a letter to the regulator on June 7 asking to “confirm that the May ETH ETF approvals, which were based on ETH being a commodity, meant the agency would shut down its Ethereum Investigation 2.0.”
A relief for Blockchain companies
The status of cryptocurrencies remains unclear, and no regulation has been proposed for them in the United States. Although Bitcoin is considered a commodity, Ether’s status has remained uncertain due to the SEC’s interest in several Ether offerings.
Earlier this year, Consensys, the company behind the popular MetaMask portfolio, sued the SEC to dissuade the regulator from overseeing the Ethereum blockchain. The lawsuit argued that if the SEC continued to exercise its authority over Ethereum, the blockchain would grind to a halt, “crippling one of the internet’s greatest innovations.”
The lawsuit came in response to a notice Wells received from Consensys indicating that the regulator was preparing to take enforcement action against the company over its MetaMask portfolio services.
The company supported it MetaMask is not a broker and “does not hold clients’ digital assets or perform any transaction functions.”
With the SEC confirming the closure of its investigation, companies offering Ethereum-based services can be relieved that they will not face action over unregistered securities offerings.
However, Consensys confirmed that it will pursue the lawsuit as it is seeking “a declaration that the MetaMask Swaps and Staking UI software offering does not violate securities laws.”