The win only resolves some of the industry’s issues, as many projects, such as Ripple, still need help with the SEC’s strict crypto enforcement practices.
Consensys, a blockchain software company, announced that the SEC’s Enforcement Division has concluded its investigation into Ethereum 2.0. This means the SEC will not pursue charges claiming that the sales of ETH are securities transactions.
ETHEREUM SURVIVES THE SEC.
Today we’re happy to announce a major win for Ethereum developers, technology providers, and industry participants: the Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0.
This means that the SEC…
— Consensys (@Consensys) June 19, 2024
The decision came after Consensys sent a letter on June 7 asking the SEC about the implications of recent Ethereum ETF approvals, which implied that ETH is classified as a commodity. However, the company stressed that the “fight” continues. In April, it filed a lawsuit against the SEC, seeking a declaration that offering the UI software MetaMask Swaps and Staking does not violate securities laws.
Over the past year, Consensys has received three subpoenas from the SEC, with the most recent in March. Additionally, the company received a Wells notice in A, indicating possible upcoming enforcement action.
SEC’s Recent Actions in the Crypto Ecosystem
The SEC’s jurisdiction over Ethereum has been a contentious issue, with the agency issuing subpoenas to firms affiliated with the Ethereum Foundation. SEC Chair Gary Gensler has previously avoided stating whether ETH is a security, although he has suggested that many cryptocurrencies could fall under SEC regulation. In contrast, Commodity Futures Trading Commission Chair Rostin Behnam has classified ETH as a commodity.
Consensys views the classification of ETH sales as a non-security transaction as a positive outcome for Ethereum builders, technology providers, and other stakeholders, suggesting a supportive regulatory environment and marking a significant milestone. However, this only resolves some of the crypto community’s issues, as many members, such as Ripple (XRP), still need help with the SEC’s strict cryptocurrency enforcement practices.
Bill Morgan has criticized the SEC for what he sees as unfair treatment towards Ripple. He pointed out that Ethereum received favorable treatment nearly six years after the Hinman speech, which stated that Ethereum was not a security. Morgan also highlighted the SEC’s inconsistent approach to crypto regulations.
Ethereum’s second free pass from the SEC almost exactly 6 years after the Hinman free speech.
Ethereum’s and Ripple’s different treatment will forever show how arbitrary the SEC has been in crypto. https://t.co/Coxf6czO9r pic.twitter.com/WNcacVYhNE
— bill morgan (@Belisarius2020) June 19, 2024
In a recent SEC filing, a calculation based on the settlement with Terraform Labs suggested a much lower penalty than the proposed $2 billion, demonstrating further inconsistency in the SEC’s enforcement actions.