SEC Backs Off Ethereum Investigation, But Gensler’s Crusade Continues
Consensys, the maker of the popular MetaMask crypto wallet, has scored a victory against the Securities and Exchange Commission (SEC) in the ongoing battle over Ethereum. The SEC has backed off its campaign to investigate developers who use Ethereum, acknowledging that the cryptocurrency is a commodity, not a security.
This move comes after Consensys took the bold step of suing the SEC in April, seeking to force the agency to back off. The lawsuit was a preemptive strike against potential charges from the SEC, which had been issuing subpoenas to developers using Ethereum for over a year.
The SEC’s legal position became shaky after approving Ethereum ETFs, signaling that the currency is indeed a commodity. In response to an inquiry from Consensys, the SEC informed the company that it was closing its investigation into Ethereum 2.0, the blockchain’s new proof-of-stake system.
While the market reacted positively to the news, with the price of Ethereum jumping around 3%, there is still a cloud hanging over the situation. Consensys revealed that its lawsuit with the SEC is ongoing, indicating that the agency is targeting MetaMask for allowing token swaps on DeFi platforms and offering staking services.
The SEC’s argument is that by facilitating token trades and staking, Consensys is acting as an unlicensed brokerage engaged in securities trading. This aggressive stance is in line with SEC Chair Gary Gensler’s tough approach to crypto regulation.
Despite this setback, the crypto industry has won a battle in the fight against SEC scrutiny. However, the war is far from over as Gensler continues his crusade against Ethereum and other crypto projects. Stay tuned as this story develops.
