SEC Concludes Investigation of Ethereum Confirms ETH as a Commodity
The Securities and Exchange Commission (SEC) has officially ended its investigation into Ethereum, affirming that the sale of ETH is not classified as securities transactions. This conclusion comes in response to a request from ConsenSys to clarify Ether’s status as a commodity following the approval of ETFs in May.
ETH ESCAPES SEC SCRUTINY
Exciting news for Ethereum enthusiasts as the SEC’s Enforcement Division has closed its investigation into Ethereum 2.0. ConsenSys, the Ethereum developer, shared this victory, hailing it as a significant achievement for the Ethereum community. However, they acknowledge that the ongoing regulatory battle with SEC Chairman Gary Gensler is far from over.
ConsenSys had written to the SEC on June 7, seeking confirmation that the approval of ETH-based ETFs would result in the investigation into Ethereum 2.0 being closed. Laura Brookover, ConsenSys’ attorney, revealed the SEC’s notification letter announcing the conclusion of the investigation without any charges being filed.
ETH CONFIRMED AS A COMMODITY
ConsenSys reiterated that Ethereum serves as a global computing platform rather than an investment opportunity, with Ether (ETH) being recognized as a commodity by the Commodity Futures Trading Commission (CFTC). They clarified that applications utilizing Ethereum for transactions are not considered securities brokers and fall outside the SEC’s regulatory purview.
CRITIQUE OF SEC’S ACTIONS
ConsenSys condemned the SEC’s perceived overreach, cautioning that such actions could jeopardize America’s position as a leader in the internet’s next phase. They warned that this could pave the way for other nations to take the lead in establishing an economy founded on the technological advancements of the internet.
In a similar vein, Bill Morgan criticized the SEC for its inconsistent treatment of cryptocurrencies, citing the recent closure of the Ethereum investigation as a “second free pass” given after the 2018 Hinman speech declaring Ethereum as non-securities. He contrasted this leniency with the SEC’s aggressive stance against Ripple (XRP), alleging arbitrary and unjust actions that demonstrate a lack of regulatory consistency.
IMPACT ON CRYPTO MARKET
Following this development, Lookonchain reported a substantial investment of 5,603 ETH ($19.6 million) by a prominent whale investor. Since May 30, this investor has withdrawn a total of 16,604 ETH ($59 million) from Binance at an average price of $3,600 per ETH.
While the market celebrates this decision, the SEC’s statement included a disclaimer that the closure of the investigation does not absolve the involved parties of any potential wrongdoing. Nonetheless, this outcome is viewed as a victory for Ethereum and the wider crypto community seeking regulatory clarity.