SEC Concludes Investigation into Ethereum’s Status

The Enforcement Division of the U.S. Securities and Exchange Commission (SEC) has concluded its investigation into Ethereum 2.0, according to a statement from ConsenSys.

ETHEREUM SURVIVES THE SEC.

Today we’re happy to announce a major win for Ethereum developers, technology providers, and industry participants: the Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0.

This means that the SEC…

— Consensys (@Consensys) June 19, 2024

The SEC took this step after the organization sent a letter requesting clarification on the asset class when approving spot ETH-ETFs.

The relevant request from ConsenSys was submitted on June 7. In it, the company’s employees asked the regulator to confirm that the registration of 19b-4 applications for the product was based on the premise that the asset is classified as a commodity, and therefore, the agency would close the investigation.

“Ethereum has survived the SEC. In other words, the agency will not press charges that the sale of ether constitutes securities transactions,” wrote ConsenSys.

On April 26, the organization filed a lawsuit against the Commission and its five unnamed employees over “ETH regulation.” In it, they urged the court to officially confirm the wording that the asset would not be considered a security.

According to company representatives, on April 10, they received a notice warning of potential enforcement actions related to MetaMask Swaps and MetaMask Stakes products.

News from ConsenSys led to a surge in Ethereum’s price during morning trading on June 19. The rate rose above $3580 before retreating to around $3560. At the time of writing, daily growth rates are 3.7%, according to CoinGecko.

The SEC’s pressure regarding the status of the second-largest cryptocurrency by market capitalization extended beyond ConsenSys. In March, the Ethereum Foundation and several other organizations received requests from the agency regarding ETH’s status. This prompted a reassessment of the chances for ETH-ETF approval in May.

On June 15, after the approval of 19b-4 applications, Bloomberg analyst Eric Balchunas announced the postponement of the launch date for spot Ethereum-ETFs to July 2, following issuers’ receipt of comments on S-1 forms.

Two days earlier, SEC Chairman Gary Gensler noted that he expects the bureaucratic procedures to be completed for the start of ETH-ETF trading by the end of summer.

On June 18, sources from The Block confirmed Balchunas’s information regarding the regulator’s comments on S-1 forms. Issuers need to prepare them by June 21.

A source from one of the organizations that submitted documents stated that the latest round of comments was “reasonable,” and they eagerly anticipate swift approval. A representative from another company described them as “light.”

“I believe that applicants will submit documents fairly quickly this week. Then we will see how many more turns of the wheel are needed,” he added.

K33 Research estimated a net inflow into ETH-ETF of $3.1–4.8 billion in the first five months after trading begins.

Previously, VanEck raised its Ethereum forecast to $22,000 by 2030.