Consensys Says SEC Is Dropping Ethereum Investigation

Consensys Says SEC Is Dropping Ethereum Investigation

Consensys has disclosed that the US Securities and Exchange Commission (SEC)’s investigation of Ethereum is now closed.

The leading Ethereum developer announced via a post on X. It said that Ethereum developers, industry participants, and technology providers should celebrate the great news.

The announcement

Consensys revealed that the Enforcement Division of the securities regulator had informed it about the closure of the investigation.

It said that the SEC would no longer bring charges against exchanges and other industry participants for selling Ether tokens. This is because they will not be considered securities transactions anymore.

Last month, the SEC approved Ethereum ETFs. Consensys sent a letter to the securities regulator after the said approval.

The company said that the ETFs were based on Ether being a commodity rather than a security. It had questioned the securities agency about its investigation.

Laura Brookover, Consensys’ lawyer also posted the notification letter from the SEC. She also shared the company’s statement on X.

The attorney said that there had been a very rapid change since Consensys had filed a lawsuit against the SEC back in April.

She revealed that the investigation into Ethereum had come to an end after a year and no one had been charged.

The notification

However, the statement from the SEC did use some confusing language. The notification of the investigation closure came with a disclaimer.

The agency said that just because the investigation had closed did not mean that the party was exonerated, or that there may not be other actions due to the investigation.

Consensys had received a Wells Notice from the SEC over its renowned MetaMask wallet. The notice is regarded as a warning of upcoming legal action.

This prompted the company to go on the offensive in April when it filed a lawsuit against the Commission.

The case

Consensys had claimed in the lawsuit that the SEC was trying to label ETH as security and wanted to take control of the cryptocurrency’s future.

It had been revealed in the unredacted lawsuit that the SEC had already decided Ethereum’s status a year earlier.

With the latest announcement, Consensys asserted that it did not intend to back down in its lawsuit against the regulator.

It said that it also wants the SEC to clarify that there are no securities law violations related to its user interface software MetaMask Swaps and Staking.

Consensys also asserted that they should not need a lawsuit to get the regulatory clarity required for the industry.

It said that the industry was supporting many other technologies and innovations in the market. The SEC’s decision is undoubtedly a good one for it.

However, Consensys said that it was still critical of the approach that the SEC has taken for regulating crypto.

It said that it was undoubtedly a momentous occasion for the industry. However, it could not be considered a fix for the aggressive and unlawful crypto enforcement actions that the SEC had carried out.