The United States Securities and Exchange Commission (SEC), known for its previous anti-crypto stance, has signaled shift in its anti-crypto approach. In a surprising move, the SEC has ended its investigation on Ethereum and MetaMask developed by Consensys, deliberating on whether it qualifies as a security or commodity. This development is seen as a positive turn in the crypto landscape.
Consensys, a blockchain firm, and Ethereum developer, shared their satisfaction with the SEC’s recent decision in a post on X (formerly Twitter) dated 19 June. They announced, “The Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0.”
The company further stated, “This means that the SEC will not bring charges alleging that sales of ETH are securities transactions,” which they celebrated as a “major win for Ethereum developers, technology providers, and industry participants.”
The SEC’s decision was in response to a letter from Consensys to the SEC on June 7, asking for confirmation if the agency would end its investigation into Ether ETH amidst the regulator’s approval of spot Ether Exchange-traded Fund (ETFs) in May, which were based on ETH being considered a commodity.
The response letter from the Division of Enforcement (SEC) shared by Consensys senior counsel Laura Brookover states that the agency does not “intend to recommend an enforcement action.”
Despite the end of the investigation into Ethereum, Consensys remains concerned for the developers, technology providers, and industry participants affected by the SEC’s ‘Unlawful and aggressive’ stance. They want no company or individual to be in their position of having a costly legal fight to confirm what is lawful and what is unlawful.
SEC sent a Wells notice to Consensys warning that its MetaMask possibly violated security laws. Soon after receipt of this notice, it sued the SEC in April. In a lawsuit, they seek a declaration of not violating security laws just by offering the MetaMask user interface and their stacking.
The lawsuit alleged that the SEC and its Chair Gary Gensler considered ETH to be a security since early 2023. Consensys blamed SEC Division of Enforcement Director Gurbir Grewal authorized a formal order of investigation into Ether’s classification as a security on March 28, 2023.
This positive news has been reflected in the price of Ethereum with a surge of 3.08% over the past 24 hours. However it experienced 17.34% the drop in the trading volume indicating Ethereum held by investors.
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