The price of Ether has received a bullish boost in otherwise lackluster markets after it was announced late Tuesday that the United Securities and Exchange Commission would drop its investigation into whether Ethereum is a security without filing any charges.
Ether Is Not A Security
As ZyCrypto reported, the technology incubator firm behind the MetaMask Ethereum wallet, Consensys, sued the Securities and Exchange Commission in April. In its 34-page complaint, Consensys said the regulator sought to “regulate ETH as a security” post-merge. Ethereum transitioned from a proof-of-work to a proof-of-stake network after the merge upgrade in September 2022. That’s why the subject of the SEC’s probe has been dubbed “Ethereum 2.0”.
This followed the news in March that an unnamed “state authority” was investigating the Ethereum Foundation. But now, that investigation has been dropped.
“Ethereum survives the SEC,” Consensys said in a June 18 post on X. “This means that the SEC will not bring charges alleging that sales of ETH are securities transactions.” Consensys hailed the move as a “major win for Ethereum developers, technology providers, and industry participants.”
Consensys explained in the X thread that the SEC’s decision came about after the firm sent a letter on June 7 asking the regulator to confirm that the greenlighting of key spot ETH exchange-traded fund filings in May indicated that it would conclude its probe into Ethereum 2.0. The approvals were based on the assumption that ether was a commodity, not a financial security, Consensys postulated.
The Fight Continues
Consensys senior counsel Laura Brookover shared the SEC’s response letter to the company, which indicates that the commission does not “intend to recommend an enforcement action.”
“Our fight continues,” Consensys, however, posited. “In our lawsuit, we also seek a declaration that offering the user interface software MetaMask Swaps and Stakin does not violate the securities laws.”
While the SEC Chair Gary Gensler has always sidestepped direct questions about Ethereum’s security status, Commodity Futures Trading Commission Chairman Rostin Benham has publicly classified the second-largest cryptocurrency by market cap as a commodity.
The price of Ether (ETH) has reacted positively to the SEC’s decision to halt its investigation into Ethereum, registering a marked increase of 4.0% over the last 24 hours. As of publication time, ETH was changing hands for $3,553.