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DailyBubble News

The SEC’s fight with Consensys over Ethereum 2.0 is not over

Consensys, the creator of MetaMask crypto wallet, recently announced that the Securities and Exchange Commission (SEC) has halted its investigation into Ethereum developers. This decision reflects the legal consensus that Ethereum is considered a commodity, not a security, which falls outside the SEC’s jurisdiction. Despite this positive development, SEC Chair Gary Gensler’s scrutiny of Ethereum continues.

The conflict between Consensys and the SEC escalated when Consensys filed a lawsuit in April to prevent potential charges from the SEC. The SEC had been issuing subpoenas to Ethereum developers for over a year, signaling imminent legal action. However, with the approval of Ethereum ETFs and the closure of the Ethereum 2.0 investigation, it became clear that Ethereum is indeed a commodity.

Although the market reacted positively to the news, with Ethereum’s price rising by 3%, Consensys’s ongoing lawsuit against the SEC indicates that the battle is not yet over. The SEC is focusing on MetaMask, alleging that it facilitates token swaps in the decentralized finance (DeFi) market and provides staking services, which the SEC views as brokerage activities involving securities.

Despite the SEC’s continued pursuit, the argument that Consensys is operating as an unlicensed brokerage trading securities is likely to be challenged. Nonetheless, Gensler’s persistent regulatory approach towards crypto suggests that the industry is far from resolving regulatory issues. While the crypto industry may have won a battle, the war against regulatory scrutiny continues.

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