Ethereum Investigation Closed, ETH Recognised as Commodity by SEC
The SEC has confirmed that ETH sales are not securities transactions and has formally completed its inquiry into Ethereum. In response to a letter from ConsenSys requesting that the SEC uphold Ether’s commodity classification following the May ETF approvals, the SEC made this judgement.
The SEC is survived by Ethereum.We are pleased to report today a significant victory for Ethereum developers, technology suppliers, and industry players: the SEC’s Enforcement Division has informed us that it is concluding its inquiry into Ethereum 2.0. Consequently, the SEC…
June 19, 2024 Consensys (@Consensys)
Consensys escapes the SEC, but the fight continues.
The announcement was made by Ethereum creator ConsenSys, who hailed it as a “major win for Ethereum developers, technology providers, and industry participants.” ConsenSys stressed that the regulatory fight with the SEC, headed by Gary Gensler, is still going on despite this win.
ConsenSys requested in writing on June 7th that the SEC verify that the Ethereum 2.0 probe will be closed upon approval of ETH ETFs, given that ETH is a commodity. Laura Brookover, the attorney for ConsenSys, disclosed the notification letter from the SEC announcing the conclusion of the inquiry and the absence of any charges.
Lastly, a security is not Ethereum.
ConsenSys highlighted that Ether (ETH) is a commodity, as verified by the CFTC, and that Ethereum is a worldwide computing platform rather than an investment scheme. They added that apps that use Ethereum for transactions are not subject to SEC regulation and are not securities dealers.
Reactions to the SEC’s Excessive Power
ConsenSys said that the SEC’s activities could jeopardise America’s leadership in the upcoming internet generation and denounced the agency’s efforts as an illegal attempt to seize power. They emphasised that this might allow other nations to take the lead in creating economies based on the internet’s technological advancements.
Reiterating a similar idea Bill Morgan criticises the SEC for treating cryptocurrencies inconsistently, calling attention to the way the inquiry into Ethereum was recently closed as a “second free pass,” in the wake of the 2018 Hinman speech in which the SEC said Ethereum was not a security. He draws a comparison between this and the SEC’s tough stance against Ripple (XRP), alleging that the agency’s actions are unjust and arbitrary and that they demonstrate a lack of coherence in the agency’s regulatory approach. Impact of Crypto Lookonchain reported shortly after the release of this information that a notable whale investor had bought an extra 5,603 ETH ($19.6 million). This investor has taken out 16,604 ETH totaling $59 million from Binance since May 30 at an average price of $3,600 per ETH. Although the SEC stated in a routine statement that the closure does not necessarily absolve the parties involved of all wrongdoing, the market is cheering this action, and Ethereum and the larger crypto community seeking regulatory clarification view it as a victory.
source : coinpedia