Ethereum wallet MetaMask developer Consensys announced today that the SEC enforcement division has informed that they will end the investigation into Ethereum 2.0, will not charge Ethereum sales as securities transactions, or be inspired by this news, ETH rebounded above $3,500.
The U.S. Securities and Exchange Commission (SEC) has been reluctant to state whether “Ethereum” should be classified as a security. Against this backdrop, Consensys, the parent company of the MetaMask wallet, received a Wells notice from the SEC in April, in which the SEC determined that Consensys was an unlicensed broker-dealer intending to violate securities laws with the MetaMask wallet and took enforcement action.
To defend the Ethereum ecosystem, Consensys also filed a lawsuit against the SEC in that month, accusing the SEC of intending to classify Ethereum as a security, which is an “illegal seizure” of Ethereum, and requesting the court to declare that Ethereum is not a security and arguing that any investigation into ConsenSys based on the premise that Ethereum is a security would violate administrative procedures.
End of Ethereum investigation by SEC
After two months of silence, Consensys announced earlier today (19th) that the SEC will end the investigation into Ethereum and will not charge Ethereum sales as securities transactions. Although the SEC has not officially announced it yet, if it is as described by Consensys, it means that the SEC recognizes Ethereum as a commodity, not a security, like Bitcoin, and implies that Ethereum may not face legal troubles in the future, which is significant.
However, Consensys continued to point out that the lawsuit between the company and the SEC is ongoing, and they are still seeking the SEC to clarify that MetaMask Swaps and Stake do not violate securities laws. Perhaps influenced by the news that the SEC will end the investigation into Ethereum, the price of ETH rebounded more strongly today compared to Bitcoin. From around $3,400 in the early morning, it rose to $3,534, an increase of nearly 4% in 7 hours.
Spot Ethereum ETF issuers to respond to SEC comments before Friday
At the same time, the official listing of the Ethereum spot ETF has also attracted attention. After the SEC approved the 19b-4 documents (exchange rule changes) submitted by eight Ethereum spot ETF issuers last month, the issuers are still waiting for SEC approval of their S-1 documents (registration statement) before they can officially start trading.
According to The Block, two sources revealed that Ethereum spot ETF issuers received comments on the S-1 documents from the SEC last week and plan to submit responses before Friday this week. A source from one issuer described the latest round of comments as “reasonable” and hopes for swift approval, while another issuer’s source described the comments as “easy.”
Bloomberg ETF analyst James Seyffart stated that Bitwise submitted a revised version of the S-1 document to the SEC on the 18th, which may still need adjustments and final approval from the SEC. He and another analyst, Eric Balchunas, believe that the Ethereum spot ETF is likely to be launched before July 4.
SEC Chairman Gary Gensler previously stated that the S-1 document for the Ethereum spot ETF is expected to be approved sometime this summer, and the approval time will depend on the issuer’s response speed to the SEC feedback.