- The SEC has backed down on its Ethereum investigation.
- The community slammed the Howey test.
As a long-term crypto investor with experience in the industry, I’m thrilled to hear about the SEC’s decision to close its investigation into Ethereum 2.0 and ConsenSys. This update is a significant win for the ETH community, as it marks a step forward in recognizing Ethereum as a decentralized platform rather than a security.
According to reports, the U.S. Securities and Exchange Commission (SEC) is nearing the completion of its investigation into Ethereum [ETH] 2.0 and ConsenSys, the company responsible for MetaMask wallet.
Upon receiving the latest news, I, as an analyst, can report that ConsenSys has declared victory in its encounter with the Securities and Exchange Commission (SEC). This development is seen as a significant triumph for Ethereum developers.
As an analyst, I’m thrilled to share some good news with you all. The Enforcement Division of the Securities and Exchange Commission (SEC) has recently decided to close their investigation into Ethereum 2.0. This is a significant victory for the Ethereum development community, technology providers, and industry participants. We can breathe a collective sigh of relief as this decision marks a major step forward in the recognition and acceptance of Ethereum’s decentralized and innovative technology by regulatory bodies.
After the Ethereum Merge transpired, marking the shift from the proof of work (PoW) consensus mechanism to proof of stake (PoS), Ethereum 2.0 signifies this new phase in the network’s development. The company elaborated on the consequences for ETH sold following the Merge.
The Securities and Exchange Commission (SEC) will not accuse the sale of Ethereum (ETH) as being securities trades.
SEC – Ethereum tussle, and community reactions
As a crypto investor, I’d put it this way: In April, I found myself dismayed to learn that Consensys had taken legal action against the SEC. They accused the Securities and Exchange Commission of overstepping its bounds with an “unjustified power grab.” Specifically, they argued that the SEC was wrongly targeting Consensys and its developers, and attempting to classify Ethereum (ETH) as a “security.”
Since the lawsuit, there have been significant developments. The hostile stance towards crypto has softened, and there’s been partial acceptance for spot Ethereum Exchange-Traded Funds (ETFs).
It wasn’t too unexpected that the SEC chose to discontinue their investigation based on the information provided in their statement.
“The Commission has no plans to take enforcement action against Consensys Software Inc. in relation to this probe.”
Alexander Grieve, Government Affairs officer at Paradigm, expressed his viewpoint that the SEC’s letter was “uncharacteristically vague” or “relatively evasive” in terms of providing clear guidelines for notification.
The SEC’s recent update has sparked renewed discussion surrounding the application of the Howey test. This test is a key tool the SEC employs to identify investments that fall under the category of securities.
Reacting to the SEC-Ethereum update, Paul Grewal, chief legal officer at Coinbase, commented,
“It’s good that we can put that theory of liability behind us, which wasn’t the strongest to begin with. Now, let’s discuss how to make sense of this decision as well as the other projects criticized by the SEC’s flawed Howey analysis.”
Analyst and tech investor Fred Krueger expressed his disagreement with the Howey test being referred to as a “joke,” implying that he believed it to be flawed. He further suggested that the SEC’s decision may have been influenced by political considerations.
ETH price action
It appears that the recent update has shifted from being unfavorable to beneficial for significant Ethereum investors.
Approximately three hours following the update, a whale purchased an astounding $19.7 million worth of Ethereum (ETH). Currently, Ethereum is experiencing a 3% price increase over the past day and is being exchanged at around $3,500 per token.
The Open Interest (OI) levels rose by 4% signifying a significant increase in market participants’ positions, boosting the derivatives market and potentially providing support for optimistic investors.
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2024-06-19 12:23