Victory for Ethereum! SEC Backs Down, Confirms ETH is NOT a Security
Qadir AK19 Jun 20242 min read
In a landmark decision, the SEC has officially concluded its investigation into Ethereum, confirming that ETH sales are not securities transactions. This resolution follows a letter from ConsenSys requesting the SEC to reaffirm Ether’s status as a commodity after the approval of Ethereum ETFs in May.
ConsenSys, a leading Ethereum developer, announced the news, calling it a “major win for Ethereum developers, technology providers, and industry participants.” Despite this triumph, ConsenSys emphasized that the regulatory battle with the SEC, under the leadership of Gary Gensler, is far from over.
A Turning Point for Ethereum
On June 7, ConsenSys sent a letter to the SEC seeking confirmation that the approval of ETH ETFs, based on ETH being a commodity, would lead to the closure of the Ethereum 2.0 investigation. ConsenSys attorney Laura Brookover shared the SEC’s notification letter, confirming the end of the investigation with no charges against any parties.
ConsenSys reiterated that Ethereum is a global computing platform and not an investment scheme, emphasizing that Ether (ETH) is classified as a commodity, a view supported by the CFTC. They also clarified that applications using Ethereum for transactions are not securities brokers and therefore not subject to SEC regulation.
Criticism of the SEC’s Approach
ConsenSys criticized the SEC’s actions as an unlawful power grab, warning that such maneuvers could jeopardize America’s leadership in the next generation of the internet. They cautioned that this could allow other countries to take the lead in developing an economy rooted in technological advancements.
Bill Morgan echoed similar concerns, criticizing the SEC for its inconsistent treatment of cryptocurrencies. He noted the recent closure of the Ethereum investigation as its “second free pass,” following the 2018 Hinman speech that said Ethereum was not a security. Morgan contrasted this with the SEC’s aggressive stance against Ripple (XRP), suggesting that the SEC’s actions are arbitrary and lack consistency.
A Win for Crypto!
Following this announcement, Lookonchain reported that a significant whale investor purchased an additional 5,603 ETH, valued at $19.6 million. Since May 30, this investor has withdrawn a total of 16,604 ETH, amounting to $59 million, from Binance at an average price of $3,600 each.
While the market celebrates this development, the SEC’s statement included standard language indicating that the closure does not necessarily clear the parties involved of all wrongdoing. Nonetheless, this decision is viewed as a victory for Ethereum and the broader crypto community seeking regulatory clarity.
Also Read: Ethereum-Based Tokens Sky-High With the SEC’s Big Move: LDO & ENS Prices Approach Crucial Resistance
Want to learn more about Ethereum’s future? Stay tuned to Coinpedia!
