U.S. SEC Drops Ethereum Investigation, Confirmed by Consensys

In a statement, Consensys – developers of software wallet MetaMask and popular zkEVM ecosystem Linea – have confirmed that the U.S. Securities and Exchange Commission (SEC) is closing its investigation into Ethereum 2.0, and whether sales of $ETH constituted securities transactions.

This is the latest news in a 3-month saga, which began with Consensys filing a lawsuit against the SEC alleging that if Ethereum would to be deemed a security, the SEC’s regulation would “jeopardize the United States’ ability to use Ethereum and similar blockchain technology.”

The announcement has been considered a big win by the web3 community at large, with Ethereum rising above $3,500 USD shortly after the news broke.

U.S. SEC Drops Ethereum Investigation, Consensys Lawsuit — Source: Consensys

Why has the SEC dropped its Ethereum investigation?

In a thread on X, Consensys explained that after the approval of the first spot Ethereum exchange-traded funds (ETFs) by the U.S. SEC on May 23, they wrote a letter to the SEC on June 7, asking them to confirm that these approvals meant $ETH is viewed a commodity, rather than a security, and that the investigation would come to a close.

The U.S. SEC has seemingly confirmed to Consensys that this is indeed the case.

This is another boon for cryptocurrency as a whole, and sees back-to-back months of positive regulatory news for Ethereum – which has resulted in a notable surge of confidence in $ETH amongst both institutions and individual investors.

Have Consensys withdrawn their lawsuit against the SEC?

Despite this momentous news, Consensys remarked on X that “it’s not a cure-all for the many blockchain developers, technology providers, and industry participants who have suffered under the SEC’s unlawful and aggressive crypto enforcement regime.

The firm goes on to state that their lawsuit with the SEC will continue, as they “seek a declaration that… MetaMask Swaps and Staking does not violate the securities laws.”

Founder and CEO of Consensys, Joseph Lubin, advised caution, remarking that; “While we welcome this development – it’s not enough. We must remain vigilant and continue advocating for clear and fair regulations that enable innovation to flourish,”

“The fight for a transparent and supportive regulatory environment is far from over, but I have complete faith that our community can ensure and cement the bright future of web3 technologies.”