The SEC’s decision is a significant milestone for Ethereum, as it is likely to validate its commodity status.
According to a recent announcement from Consensys, the US Securities and Exchange Commission (SEC) has concluded its investigation into Ethereum 2.0 and will no longer pursue legal action under the premise that ETH sales are securities transactions.
This is a significant victory for Ethereum developers and enterprises, according to Consensys. It eliminates a haze of uncertainty that could have impeded Ethereum’s expansion.
In March, an update on the Ethereum Foundation’s GitHub repository disclosed that the organization was under investigation by an unidentified “state authority.” Fortune reported that the SEC pursued a “energetic legal campaign” to designate Ethereum as a security following the discovery.
Consensys’ lawsuit against the Securities and Exchange Commission (SEC) in April exacerbated the uncertainty. One of the company’s objectives was to obtain a court judgment that would establish that Ether (ETH), the native token of Ethereum, is not a security.
Gurbir Grewal, the director of the SEC’s Enforcement Division, initiated a formal investigation into Ethereum’s status as a security in March 2023, according to a report by FOX Business in late April. “Ethereum 2.0” is the name of this investigation, which examines the transactions and activities associated with Ethereum that have been ongoing since 2018.
Consensys submitted a letter to the SEC, as previously mentioned, which contended that the recent approval of spot Ethereum ETFs implied that ETH was not a security and that the SEC should conclude the investigation. The decision was likely based on the assumption that ETH is a commodity, similar to BTC, and does not indicate any upcoming legal challenges.
Consensys stated that the pursuit of definitive regulatory guidelines persists, particularly in relation to services such as MetaMask Swaps and Staking, despite this progress. The team is still in the process of obtaining a more comprehensive understanding of the SEC’s regulations regarding cryptocurrency.
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