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SEC Ends Probe Into Consensus, Won’t Sue Over Ethereum

Jun 18, 2024
  • The SEC told Consensys’ lawyers it wasn’t recommending an enforcement action after ending an investigation into the company.
  • The ether price rose after the news.
As a researcher with experience in the cryptocurrency industry, I’m relieved to see that Consensys has received letters from the SEC stating that they will not be recommending an enforcement action against the company. This news comes after a lengthy investigation into Consensys and Ethereum 2.0. The price of ether (ETH) responded positively to this announcement, with ETH experiencing a rise of up to 2.6% according to TradingView data.After receiving letters from the US Securities and Exchange Commission (SEC) stating that their investigation into Consensys had concluded and no enforcement action would be taken, the cost of ether (ETH) increased.

The Securities and Exchange Commission (SEC) announced in two letters to their legal representatives on Tuesday that they would not be pursuing any enforcement actions against Consensys, which offers products like the MetaMask wallet. In a blog post, Consensys stated that the SEC had concluded its investigation into Ethereum 2.0 with them.

The email title referenced “Re: Ethereum 2.0 (C-08950)” as the subject matter, yet it failed to specifically name Ethereum, the second largest cryptocurrency by market value, within the body of the message.

Based on our current findings from the investigation into the mentioned issue, we will not be pursuing any disciplinary actions against Consensys Software Inc. on behalf of the Commission at this time.

The letter indicates that the investigation has been wrapped up, but this does not imply that no further enforcement actions will follow.

According to the Commission’s directive, its employees have the authority to inform individuals under investigation that the formal probe has been concluded. This decision will rest solely with the staff based on the reasons previously stated. However, such communication should not be perceived as a declaration of innocence or an indication that no further actions will stem from the investigation into the specified matter.

In a follow-up missive, the sentiment was repeated that the investigation could be coming to a close. However, it was made clear that there were disagreements with the factual assertions and legal interpretations put forth by Consensys’ lawyers in their correspondence to the regulatory body regarding the classification of ETH as a security following the SEC’s approval of certain spot Ether ETF filing submissions.

As a researcher studying the legal landscape of cryptocurrencies, I can tell you that in April 2023, ConsenSys filed a lawsuit against the Securities and Exchange Commission (SEC). The crux of the complaint was that the SEC had initiated an investigation into whether Ethereum, following its planned upgrade called “the merge,” would be classified as a security under U.S. securities laws.

Ether experienced a surge of approximately 2.6% following a Consensys announcement on X, as indicated by TradingView’s data. The cryptocurrency has gained nearly 3% over the past 24 hours based on CoinGecko’s statistics. The broader crypto market, represented by the CoinDesk 20 Index (CD20), has seen an increase of 1.2%.

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2024-06-19 12:19