The U.S. Securities and Exchange Commission (SEC) has concluded its investigation into Ethereum, announcing that it will not pursue charges regarding ETH sales as securities transactions. This decision has sparked outrage within the XRP community, who accuse the SEC of applying double standards and biased treatment.
Consensys, an Ethereum developer, revealed on Tuesday that the SEC’s Enforcement Division has closed its investigation into Ethereum 2.0 without taking any legal action. Consensys took to Twitter to share the news, emphasizing that the SEC has decided not to pursue allegations that the sales of ETH constituted securities transactions. This development follows the SEC’s recent approval of Ethereum spot ETFs, which Consensys argues solidifies ETH’s classification as a commodity rather than a security.
Laura Brookover, an attorney for Consensys, posted the SEC’s notification letter and the company’s official statement on Twitter. She highlighted the rapid changes since Consensys filed its lawsuit against the SEC in April, celebrating the conclusion of the investigation after more than a year of scrutiny. However, it is important to note that the SEC’s correspondence included standard language stating that the closure of the investigation should not be seen as an exoneration.
In April, Consensys took a proactive approach by filing a lawsuit against the SEC, claiming that the regulatory body was attempting to gain control over the future of cryptocurrency and intended to classify Ethereum as a security. Consensys revealed that the SEC had internally made a decision regarding Ethereum’s status a year prior, triggered by a Wells Notice related to Consensys’ MetaMask wallet.
Despite the closure of the Ethereum investigation, Consensys remains committed to its legal battle. The company seeks a declaration that its MetaMask Swaps and Staking services comply with securities laws. Consensys stressed the importance of regulatory clarity for the growth and innovation of the blockchain industry and criticized the SEC’s approach to cryptocurrency regulation.
While the conclusion of this investigation is significant, former SEC regulator Christopher Gerold pointed out that it does not prevent future regulatory actions. He highlighted that the SEC has the authority to initiate cases anywhere in the country, indicating that the legal landscape for Ethereum and other cryptocurrencies remains uncertain.
The XRP community, including prominent member Bill Morgan and several analysts, has expressed frustration and accused the SEC of practicing inconsistent regulations. Morgan argues that the leniency shown towards Ethereum, particularly as it moves closer to receiving approval for a spot ETF, demonstrates a double standard. The XRP community believes that the SEC’s recent letter clarifying Ethereum’s status contradicts its strong stance against Ripple. They argue that the criteria for classifying tokens are ambiguously applied, leading to regulatory uncertainty and uneven enforcement.
The swift resolution of Ethereum’s status in contrast to the prolonged investigation into Ripple has raised questions about regulatory consistency and potential underlying influences. The SEC’s regulatory approach is now under scrutiny.