SEC Ends Probe Into Consensys, Won't Sue Over Ethereum 2.0

The U.S. Securities and Exchange Commission (SEC) has closed its investigation into Ethereum 2.0, according to blockchain software company Consensys.

The news comes after Consensys sued the SEC in April, arguing that the regulatory body did not have jurisdiction over Ethereum as it is a commodity, not a security.

Shifting Regulatory Stance

Consensys highlighted the SEC's seemingly contradictory stance on Ethereum. While the SEC had previously declared Ether (Ethereum's native token) not to be a security in 2018, it reportedly began an investigation in 2023 treating it as one.

Consensys' lawsuit, along with public pressure from policymakers and industry participants, appears to have influenced the SEC's decision. Additionally, Consensys pointed to the SEC's approval of Ethereum ETFs (Exchange Traded Funds) in May as evidence that Ether should be considered a commodity, further undermining the basis for the investigation into Ethereum 2.0.

A Victory for Ethereum

Consensys considers the SEC's closure of the investigation a major win for the Ethereum ecosystem. It removes the threat of regulatory action against Ethereum and its developers.

However, Consensys remains concerned about the broader lack of regulatory clarity in the cryptocurrency industry. Their lawsuit also seeks a court ruling that its software offerings, such as MetaMask Swaps and Staking, do not constitute securities issuance or brokering activities.

The hope is that this development will pave the way for clearer regulations in the future, benefiting both the cryptocurrency industry and those who utilize its innovations.

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