SEC’s Ethereum Investigation Concludes, Ripple’s Fate Uncertain
The SEC has officially closed its investigation into Ethereum, opting not to pursue charges related to past ETH sales being classified as securities transactions. This decision has been welcomed by Consensys Inc., a software company focused on Ethereum, who announced the news under the title “Ethereum Survives the SEC”.
Consensys had reached out to the SEC’s enforcement unit inquiring about the implications of multiple Ethereum spot ETF approvals, which were based on ETH being considered a commodity. The SEC’s response confirmed the end of the investigation into Ethereum 2.0 with no enforcement action to be taken.
Despite this positive outcome, Consensys emphasized the need for regulatory clarity regarding Metamask’s staking and swap services without the need for a lawsuit to settle the matter.
The XRP community, embroiled in a legal battle with the SEC over the status of XRP, reacted strongly to the SEC’s decision regarding Ethereum. Pro-XRP lawyer Bill Morgan highlighted the contrasting treatment of Ethereum and Ripple by the SEC, pointing out what he called Ethereum’s second “free pass” from the regulatory agency.
The ongoing lawsuit between Ripple and the SEC, which began in 2020, hinges on whether XRP sales constitute securities transactions. While a New York federal court ruled in July 2023 that XRP is not a security, it also found that Ripple’s institutional sales of XRP were illegal. The parties are currently awaiting the court’s decision on the appropriate penalty for this violation.
The possibility of an appeal from either party remains, with the SEC previously being denied an immediate interlocutory appeal by the court. The resolution of the remedies litigation could signal the end of the SEC’s long-standing legal battle with Ripple.
As the SEC wraps up its investigation into Ethereum, the outcome of its lawsuit with Ripple remains uncertain. The regulatory agency’s next steps in this matter are eagerly awaited by both the crypto community and market participants.