ConsenSys Announces SEC to Close Investigation into Ethereum

ConsenSys has announced that the U.S. Securities and Exchange Commission (SEC) has decided to close its investigation into Ethereum 2.0.

ConsenSys is also seeking a court declaration that providing user interface software for MetaMask Swaps and Staking does not violate securities laws.

‘Major Win’ for Ethereum Community

On June 19, ConsenSys announced a significant win for Ethereum developers, technology providers, and industry participants. The SEC’s Enforcement Division informed ConsenSys that it is closing its investigation into Ethereum 2.0. This closure means the SEC will not pursue charges that the sales of ETH are securities transactions.

The decision follows a letter we sent on June 7, asking the SEC to confirm that the May ETH ETF approvals, which were premised on ETH being a commodity, meant the agency would close its Ethereum 2.0 investigation.

The closing of the Ethereum investigation is momentous, but it’s…

— Consensys (@Consensys) June 19, 2024

The announcement follows a letter sent by ConsenSys on June 7, urging the SEC to confirm that the recent approvals of Ethereum-based exchange-traded funds (ETFs), which were based on Ether (ETH) being classified as a commodity, would lead to the closure of the Ethereum 2.0 investigation.

“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 added.

ConsenSys initially filed a lawsuit against the SEC in April, opposing the agency’s categorization of ETH as a financial security. The lawsuit claims that SEC’s Gurbir Grewal, Director of the Division of Enforcement, authorized the investigation into Ethereum 2.0 on March 28, 2023, to scrutinize individuals and entities involved in the buying and selling of Ether.

The company also received a Wells Notice from the SEC in April, indicating the agency’s intent to pursue enforcement action.

ConsenSys Declares Ongoing Legal Battle as ETH Rallies

ConsenSys also said that the battle is not over. In its lawsuit, the company is seeking a court declaration that offering the user interface software MetaMask Swaps and Staking does not violate securities laws.

Our fight continues. In our lawsuit, we also seek a declaration that offering the user interface software MetaMask Swaps and Staking does not violate the securities laws. It should not take a lawsuit to provide the much-needed regulatory clarity to allow an industry that serves…

— Consensys (@Consensys) June 19, 2024

Meanwhile, ETH saw a slight increase, surpassing the $3,500 mark shortly after ConsenSys announced that the SEC had closed its investigation into Ethereum. Before the company’s post on June 19, ETH was trading at $3,493.

Within 20 minutes, ETH rose approximately to $3,541, breaking the critical $3,500 level. According to CoinGecko data, at writing time, ETH  is trading at $3,553, marking a 3.0% increase over the last 24 hours. The $3,500 level has been a key support level for traders, with ETH frequently fluctuating above and below this mark over the past 30 days.

This slight increase following ConsenSys’ announcement indicates increased investor confidence, potentially alleviating recent concerns about possible securities law violations, including those related to ETH transfers on the network if the SEC had pursued action.