Consensys: SEC closed investigation into Ethereum

Consensys, the developer of the MetaMask wallet, announced that the US Securities and Exchange Commission (SEC) has closed its investigation into Ethereum. The regulator previously issued a “Wells Notice” to the firm about the potential violation.

“The SEC's Division of Enforcement has notified us that they have closed their investigation into Ethereum 2.0. This means that the Commission will not bring charges for unregistered sales of securities,” the company said in a statement.

According to the official release, the regulator’s response followed Consensys’ appeal dated June 7, 2024. In it, the company inquired about the progress of the investigation, taking into account the fact that the Commission partially approved spot Ethereum-ETFs, indirectly recognizing the status of a commodity for the underlying assets.

The company's general counsel, Laura Brookover, issued an official response to the SEC, saying that it does not intend to recommend enforcement action against Consensys.

However, Consensys said that the fight is “not over yet”:

“It is critical that the SEC abandons its unprincipled and opaque enforcement campaign in favor of much-needed regulatory clarity for an industry that serves as the foundation for countless new technologies and innovations.”

Specifically, the firm did not withdraw its lawsuit, asking the court to find that it was not acting as an unregistered broker and never offered securities through MetaMask Swaps and Stakes products.

The background of the case

At the end of April 2024, the company announced that it had filed a lawsuit against the SEC. This step served as a response to the “Wells Notice” from the Commission. In it, the regulator stated that Consensys is selling securities without a license, including through MetaMask.

The firm later said the notice was the result of a lengthy SEC investigation into "Ethereum 2.0" to prove the security status of the asset.