• The U.S. Securities and Exchange Commission (SEC) ended its investigation into Ethereum 2.0 and will not sue Consensys over it
• Consensys is a blockchain software company founded by Ethereum co-founder Joe Lubin
• The SEC’s investigation was likely related to concerns over whether Ethereum 2.0’s transition from proof-of-work to proof-of-stake constituted an unregistered securities offering
The U.S. regulator closed its investigation into “Ethereum 2.0,” Consensys said, according to an article written by Nikhilesh De and published by CoinDesk on June 19, 2024.
SEC Investigation Details
De reported that the SEC probe into whether Ethereum’s shift to proof-of-stake consensus violated U.S. securities laws has ended without any enforcement action against the Ethereum Foundation or Consensys. This is a positive development for Ethereum as the threat of being declared an illegal security has now been removed.
The SEC had concerns that the 2016 initial coin offering (ICO) for ether may have constituted an unregistered securities sale. However, after the Merge was completed in September 2022 and Ethereum transitioned to proof-of-stake, the SEC seems to have determined that ether is sufficiently decentralized and no longer qualifies as a security.
Background on CoinDesk
The article contained standard disclosures about CoinDesk’s ownership, editorial policies, and terms of use. CoinDesk is an award-winning cryptocurrency news site that was acquired by the Bullish group in November 2023.
The Bullish group is majority owned by Block.one and has interests in various blockchain businesses. CoinDesk operates independently with policies to protect its editorial independence. CoinDesk employees may receive compensation in options from Bullish.
Conclusion
In summary, the SEC has dropped its investigation into Ethereum without taking any enforcement action. This is a positive sign for the future of Ethereum and its status as a non-security decentralized network. The article providing this update came from CoinDesk, a leading crypto news organization.
