Ethereum Soars 3% As Consensys Says The SEC Drops Investigation Into Ethereum 2.0 Following ETH ETF Approvals

Updated: 19 June 2024

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Ethereum surged 3% after Consensys said the US Securities and Exchange Commission (SEC) ended its probe into Ethereum 2.0, boosting sentiment around the altcoin ahead of the launch of an ETH ETF.

“The Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0,” Consensys said in a Jun. 19 post on X. “This means that the SEC will not bring charges alleging that sales of ETH are securities transactions.”

Consensys Calls “Momentous” End Of Ethereum 2.0 Investigation A “Major Win”

Consensys said the development is a “major win” for Ethereum developers. In an X thread, the company revealed that the SEC’s decision followed a Jun. 7 letter it sent to the regulator.

The decision follows a letter we sent on June 7, asking the SEC to confirm that the May ETH ETF approvals, which were premised on ETH being a commodity, meant the agency would close its Ethereum 2.0 investigation.

The closing of the Ethereum investigation is momentous, but it’s…

— Consensys (@Consensys) June 19, 2024

ETH ETF Launches Await Green Light From SEC

In the letter, the company asked whether the approval of ETH ETFs (exchange-traded funds) would end the Ethereum 2.0 investigation. The approval has not yet given the green light for issuers to launch these investment products. However, Consensys wrote that the approval was based on the premise that ETH tokens were commodities.

Although the closing of the Ethereum investigation is “momentous,” the company stated that it is “not a cure-all” for the multiple blockchain developers, providers and participants “who have suffered” under the SEC’s “aggressive” regulatory regime.

ETH’s Security Status Still Unclear Ahead Of Final ETH ETF Approvals

Consensys went on the offensive earlier this year when it filed a lawsuit against the SEC in April. The reason for the filing was to oppose the agency’s classification of ETH as a financial security. It now seems the company is still dead set on battling it out with the SEC. “Our fight continues,” the firm said at the end of the X thread.

Our fight continues. In our lawsuit, we also seek a declaration that offering the user interface software MetaMask Swaps and Staking does not violate the securities laws. It should not take a lawsuit to provide the much-needed regulatory clarity to allow an industry that serves…

— Consensys (@Consensys) June 19, 2024

In its lawsuit, Consensys alleged that SEC Division of Enforcement Director, Gurbir Grewal, approved the investigation into Ethereum 2.0 on Mar. 28 last year. That was before the company received a Wells Notice from the SEC prior to Consensys filing its lawsuit.

While SEC chair Gary Gensler has avoided answering questions regarding ETH’s security status, Commodity Futures Trading Commission Chair Rostin Behnam has categorized the altcoin as a commodity.