Ethereum supporters can now breathe a big sigh.
The US Securities and Exchange Commission has officially dropped its investigation of the ecosystem’s blockchain.
Consensys, a Ethereum-development studio, shared the latest news about X over night.
“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,” The company has posted a notice.
“This means that the SEC will not bring charges alleging that sales of ETH are securities transactions.”
Fortune published a report in March that the SEC was looking into three companies, unnamed and related to Ethereum but not the protocol itself.
Consensys sued the SEC a month later for regulatory overreach. In the lawsuit, Gary Gensler was accused of trying to take control of crypto space by using legal maneuvers which would have forced ETH in to a securities definition after it switched to proof-of stakes in September 2020.
In part of these filings, it was revealed that Consensys received a Wells Notice from the SEC indicating its intention to sue. Joe Lubin, Ethereum’s co-founder, founded the Fort Worth company, which is home to popular web3 technology, including MetaMask, a crypto wallet, and Infura API.
The SEC’s probe into spot ether was supposed to end following the approval of the ETFs in the last month. However, this formal notice has put an end to one of the crypto industry’s biggest existential concerns, for the time being.
Jay Clayton, the former SEC Chairperson, initially agreed with William Hinman of SEC’s Director of Corporation Finance that Ethereum was not a security for 2019, because there wasn’t a central authority controlling the cryptocurrency. Gensler, who has since backed off his initial thoughts, had not made an official announcement from the agency.
Alexander Grieve (government affairs lead for Paradigm Venture Capital) tweeted Wednesday morning the SEC letter to Consensys. It says:
“We write to provide notice that we have concluded the investigation in the [matter of Ethereum 2.0]…. based on the information we have as of this date, we do not intend to recommend an enforcement action by the Commission against your client, Consensys Software Inc. with respect to this investigation.”
In the letter, it was stated that the notification had been given in accordance with the Securities Act guidelines which states that “must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff’s investigation.”
Consensys is a happy company, but crypto still faces other legal risks. There’s been no news about the SEC dropping its Uniswap investigation, but a lawsuit is not yet filed.
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