Blockchain development company Consensys says the U.S. Securities and Exchange Commission (SEC) is closing its Ethereum 2.0 investigation, which sought to determine whether the second-largest cryptocurrency by market capitalization is a security.
In April, Consensys received a Wells Notice from the SEC indicating that the regulator planned to take legal action against the company over its MetaMask wallet, which allows users to hold ETH and other cryptocurrencies on their own.
In response, Consensys sued the SEC and attempted to halt its investigation into Ethereum. The company argued that the asset is a commodity and therefore outside the jurisdiction of the securities watchdog.
In a new statement, Consensys said it has received notice that the SEC will no longer pursue its investigation and enforcement actions. This comes after the regulator last month gave the green light to the sale of spot Ethereum exchange-traded funds (ETFs).
“On June 7, we sent a letter asking the SEC to confirm that the ETH ETF approvals in May, which assumed Ether was a commodity, meant the agency would end its Ethereum 2.0 investigation.
Today, the SEC’s Enforcement Division responded by informing us that it is closing its investigation into Ethereum 2.0 and will not take any enforcement action against Consensys.”
Despite the positive development, the battle continues, according to Consensys.
“While we are pleased with the SEC’s decision to withdraw from Ethereum, more work needs to be done to protect crypto in the United States. It is imperative that the SEC abandons its unprincipled and opaque campaign of regulation-by-enforcement in favor of providing much-needed regulatory clarity for an industry that serves as the backbone for countless new technologies and innovations.”
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