The investigation by the United States Securities and Exchange Commission (SEC) into whether Ether (ETH) is a security has been dropped. Consensys, an Ethereum developer, announced on June 19 that the SEC’s Enforcement Division has notified them of the decision to close the investigation.
According to Consensys, the SEC will not be pursuing charges that sales of ETH are securities transactions. This is seen as a significant victory for Ethereum developers, technology providers, and industry participants.
Consensys had sent a letter to the SEC on June 7, requesting an end to the investigation into Ether. This request was made in light of the SEC’s approval of spot ETH exchange-traded funds (ETFs) in May, which was based on the understanding that ETH is a commodity.
Consensys senior counsel, Laura Brookover, shared the SEC’s response letter with the firm, which stated that the agency does not intend to take any enforcement action.
The SEC has not yet provided a comment in response to this news.
Earlier this year, the SEC reportedly issued subpoenas to several companies in relation to attempts to classify ETH as a security.
In April, Consensys filed a lawsuit against the SEC after receiving a Wells notice, which warned that its MetaMask crypto wallet may have violated securities laws. The lawsuit claimed that the SEC and its chair, Gary Gensler, have considered ETH to be a security since early 2023. Consensys also alleged that the SEC’s Division of Enforcement head, Gurbir Grewal, approved an order of investigation into Ether’s security status on March 28, 2023. The lawsuit is still ongoing.
In other news, Anurag Arjun, co-founder of Polygon, recently stated that the platform never intended to surpass Ethereum, contrary to popular belief.