Surprising Twist: ConsenSys Continues Lawsuit After SEC Exit

ConsenSys, one of the most prominent players in the blockchain industry, has said it will continue pursuing its lawsuit against the US Securities and Exchange Commission (SEC), despite the regulator backing down. 

Earlier this week, the Ethereum developer announced that the SEC would close its probe into Ethereum 2.0. The decision came after the regulator approved spot Ethereum exchange-traded funds (ETFs), a move primarily seen as political. 

SEC Drops Investigation Into Ethereum 

The closure of the SEC investigation into Ethereum marks a critical milestone for blockchain developers and the entire cryptocurrency industry. The investigation revolved around claims that Ether was a commodity, not a security, as earlier alleged. 

ConsenSys responded to the SEC’s investigation in a letter saying that ETH was not a security. After approving spot Ether ETFs, the SEC is now dropping the investigations in a move that could positively impact the entire industry. 

While commenting on the ended probe, the SEC noted that the move was “a major win for Ethereum developers, technology providers, and industry participants.”

ConsenSys further said that this development meant that the SEC would no longer pursue charges that the sales of Ether accounted for securities transactions. 

Laura Brookover, an attorney for ConsenSys, noted that despite the investigation lasting more than a year, the SEC was finally shutting it down without filing charges against anyone. 

ConsenSys Will Not Drop Charges Against SEC 

ConsenSys filed a lawsuit against the SEC on April 25, 2024. The lawsuit sought to defend the Ethereum ecosystem and get a court order because Ether was a commodity.

In its lawsuit, ConsenSys argued that the SEC lacked jurisdiction to investigate or regulate the Ethereum ecosystem. 

Despite the SEC shutting down its probe, ConsenSys will continue to pursue the commission. According to Fox Business reporter Eleanor Terett, the SEC’s decision to shut down the probe was “necessary but not sufficient.” 

“We are hopeful that the antagonism to crypto among some US regulators is starting to wane and that the national investor protection strategy will evolve from the current guerrilla tactics. Until then, we soldier forth with our litigation against the SEC in Texas because we are intent on achieving more legal clarity for all,” the commission said. 

While the SEC’s letter was a positive development, the regulator has also included a standard disclaimer.

It noted that the end of these investigations should not be seen as an exoneration or a guarantee that the commission will not pursue other charges in the future.