SEC has concluded its investigation into Ethereum, deciding not to pursue charges related to past ETH sales being classified as securities transactions. Consensys Inc., an Ethereum-focused software company, announced the news in a statement titled “Ethereum Survives the SEC.” The decision came after Consensys inquired about the approval of multiple Ethereum spot ETFs and whether this marked the end of the investigation. The SEC confirmed it had closed the investigation and would not take any enforcement action. Consensys hailed the decision as a victory for Ethereum developers and industry players.
Despite this win, Consensys highlighted the need for regulatory clarity concerning Metamask’s staking and swap services, stressing that it should not require a lawsuit for the SEC to declare these services compliant with securities laws.
The SEC’s decision to end its investigation into Ethereum sparked reactions within the crypto community, particularly from XRP supporters involved in the legal battle between Ripple and the SEC. Attorney Bill Morgan noted that this was Ethereum’s second instance of receiving favorable treatment from the SEC in almost six years. He contrasted this with Ripple’s treatment, pointing out the agency’s arbitrary approach in the crypto space.
The ongoing lawsuit between Ripple and the SEC, which started in 2020, revolves around whether XRP sales constitute securities transactions. A New York federal court ruled in July 2023 that XRP is not a security, but held that Ripple’s institutional sales of XRP violated the law. The court is now determining the appropriate penalty for this violation.
While speculation suggests the lawsuit could be resolved soon, potential appeals could prolong the legal battle. The SEC’s request for an immediate interlocutory appeal was denied, and the court could issue a final decision at any time. With the SEC wrapping up its investigation into Ethereum, the resolution of the Ripple lawsuit might be on the horizon, although the regulator’s next steps remain uncertain.