SEC abandons pursuit of ETH still plans to sue MetaMask for staking and trading features
Consensys stated that the U.S. Securities and Exchange Commission (SEC) has informed the company that it will end its investigation into Ethereum 2.0. The SEC’s decision came after Consensys issued a request letter, which sought clarification on whether the SEC approved the ether attributes in the Ethereum spot ETF.
According to Consensys’ announcement, Consensys described this as a “major industry victory,” with their tweet stating: Ethereum has been spared from SEC scrutiny, meaning the SEC will not charge ETH sales as securities transactions. Our letter sent on June 7 requested the SEC to confirm that the premise of approving the Ethereum ETF in May was that ETH is a commodity. The end of the Ethereum investigation is significant, but it is not a panacea for many blockchain developers, technology providers, and industry participants who have suffered from the SEC’s illegal and aggressive enforcement in the cryptocurrency space.
ConsenSys received a Wells notice from the SEC on April 10, and subsequently decided to proactively sue the SEC, with the following main demands: Declaring in federal court that ETH is not a security, that MetaMask’s staking service does not violate securities laws, and that MetaMask is not a trading broker under federal law.
Consensys’ lawsuit is still ongoing, and FOX reporter Eleanor Terrett’s tweet pointed out that the SEC has not yet made charges against Consensys for the alleged violations mentioned in the Wells notice, which include Swap trading and staking functions in MetaMask. Charges may be formally filed in the coming days or weeks.
Consensys also stated in the announcement: Our fight continues, and we will demonstrate in the lawsuit that the features provided by the interface software MetaMask, such as Swaps and staking, do not violate securities laws, and regulatory clarity should not be provided through litigation.
