Blockchain development company Consensys says the U.S. Securities and Exchange Commission (SEC) is closing its Ethereum 2.0 investigation, which sought to determine if the second-largest cryptocurrency by market cap is a security.
In April, Consensys received a Wells Notice from the SEC indicating that the regulator was planning to pursue legal action against the company because of its MetaMask wallet, which allows users to self-custody ETH and other cryptocurrencies.
In response, Consensys sued the SEC and sought to halt the investigation into Ethereum. The company argued that the asset is a commodity and is therefore beyond the jurisdiction of the securities watchdog.
In a new statement, Consensys says it received notice that the SEC will no longer pursue the investigation and the enforcement action. This comes after the regulator greenlighted the sale of spot Ethereum Exchange-Traded Funds (ETFs) last month.
“On June 7, we sent a letter asking the SEC to confirm that the ETH ETF approvals in May, which were predicated on Ether being a commodity, meant the agency would close its Ethereum 2.0 investigation.
Today, the Enforcement Division of the SEC responded by notifying us that it is closing its investigation into Ethereum 2.0 and will not pursue an enforcement action against Consensys.”
Despite the positive development, Consensys says the fight continues.
“While we are gratified by the SEC’s decision to stand down on Ethereum, there is more work to be done to protect crypto in the United States. It is imperative that the SEC abandon its unprincipled and opaque regulation-by-enforcement campaign in favor of much-needed regulatory clarity for an industry that serves as the backbone to countless new technologies and innovations.”
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