The investigation by the United States Securities and Exchange Commission into whether Ether (ETH) is a security has been dropped.
Consensys, an Ethereum developer, announced on June 19 that the SEC’s Enforcement Division has decided to close its investigation into Ethereum 2.0. This means that the SEC will not pursue charges claiming that the sales of ETH are securities transactions. Consensys celebrated this as a significant victory for Ethereum developers, technology providers, and industry participants.
The decision from the SEC came after Consensys sent a letter to the agency on June 7, inquiring about the status of the investigation into Ether. The regulator had approved spot ETH exchange-traded funds (ETFs) in May, indicating that they view ETH as a commodity.
Laura Brookover, senior counsel at Consensys, shared the response letter from the SEC, stating that the agency does not plan to recommend any enforcement action.
Consensys had previously sued the SEC in April after receiving a Wells notice regarding its MetaMask crypto wallet potentially violating securities laws. The lawsuit claimed that the SEC, including Chair Gary Gensler, had considered ETH a security since early 2023. The SEC Division of Enforcement head had reportedly approved an investigation into Ether’s status as a security in March 2023.
Despite these legal battles, Consensys confirmed that the lawsuit is still ongoing.
In a separate development, Anurag Arjun, in an X Hall of Flame article, highlighted that Polygon never intended to surpass Ethereum but rather carve out its own niche in the market.