The Securities and Exchange Commission (SEC) of the United States has decided to end its investigation into whether Ether should be classified as a security.
According to a post by Ethereum developer Consensys on June 19, the SEC’s Enforcement Division has informed them that they are closing their investigation into Ethereum 2.0. This means that the SEC will not pursue charges against the sales of ETH as securities transactions. Consensys described this outcome as a significant victory for Ethereum developers, technology providers, and industry participants.
Consensys revealed that the SEC’s decision was prompted by a letter they sent to the agency on June 7, inquiring about the status of the investigation into Ether (ETH). This came after the SEC approved spot Ether exchange-traded funds (ETFs) in May, which were based on the premise that ETH is a commodity.
Laura Brookover, senior counsel at Consensys, shared the SEC’s response letter, stating that the agency does not plan to take any enforcement action. The SEC has not yet commented on this development.
Previously, there were reports that the SEC had issued subpoenas to several companies regarding the classification of ETH as a security. Consensys had even taken legal action against the SEC in April following a warning from the agency about their MetaMask crypto wallet potentially violating securities laws.
The ongoing lawsuit claims that the SEC, under the leadership of Chair Gary Gensler, has believed ETH to be a security since early 2023. It was alleged that an order of investigation into Ether’s status as a security was approved by SEC Division of Enforcement Director Gurbir Grewal on March 28, 2023.
Consensys mentioned in their latest post that the lawsuit is still in progress, while also addressing the misconception that Polygon aimed to surpass Ethereum, as clarified by Anurag Arjun in the Polygon Hall of Flame.