This swift resolution follows Consensys’s April lawsuit against the SEC, leading to the investigation’s closure without charges.
The controversy dates back to 2018 when the SEC declared Ether was not a security. However, in 2023, the SEC began asserting jurisdiction over Ethereum, claiming it as a security and launching an investigation.
Legal Action Leads to SEC Investigation Closure
This move was seen as invalid by many in the crypto community, including Consensys, who responded by suing the SEC on April 25th, 2024. The lawsuit aimed to stop the SEC’s investigation by arguing Ether is a commodity, not a security, outside SEC jurisdiction.
Consensys’s legal challenge was met with widespread support from policymakers, members of Congress, and the general public. The company’s stance was clear: the Ethereum ecosystem needed protection from what they deemed an overreach by the SEC. On June 7th, Consensys sent a letter to the SEC. They urged the agency to recognize that its approval of ETH ETFs in May implied Ether’s status as a commodity. This should result in the closure of the Ethereum 2.0 investigation.
Source: X
The SEC’s Enforcement Division responded favorably. They notified Consensys of the investigation’s closure and confirmed that no enforcement action would be taken against them. This decision was a relief to Consensys, who expressed gratitude but also emphasized the need for broader regulatory clarity in the crypto industry.
According to its blog post, Consensys called for clear, principled regulatory guidelines, moving away from the SEC’s enforcement-centric approach. This sentiment was reflected in their lawsuit. They also sought a court declaration that their software offerings, MetaMask Swaps, and Staking, do not constitute broker activities or the issuance of securities.
Source: X
The broader message from Consensys is that no company or individual should have to undergo costly litigation to gain regulatory clarity. As stated in their lawsuit, Consensys aims to build software that empowers users worldwide to interact with the Ethereum network without the uncertainty and burden of unlawful enforcement actions.
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