SEC Halts Ethereum Investigation Permanently Ripple Next in Line

The Securities and Exchange Commission (SEC) has concluded its investigation into Ethereum, raising questions about whether a similar action will be taken in the ongoing lawsuit against Ripple.
Consensys Inc., a company focused on Ethereum software, announced the news in a statement titled “Ethereum Survives the SEC.” The SEC has decided not to pursue charges against certain past ETH sales, stating that they are not securities transactions.
Consensys reached out to the SEC’s enforcement unit on June 7, inquiring about the approval of multiple Ethereum spot ETFs and whether this marked the end of the investigation into Ethereum 2.0. In response, the SEC confirmed that the investigation has concluded and no enforcement action will be taken.
Consensys sees this decision as a victory for Ethereum developers and industry participants. However, they also highlighted the need for regulatory clarity regarding Metamask’s staking and swap services, emphasizing that it should not require a lawsuit for the SEC to declare these services compliant with securities laws.
The SEC’s decision regarding Ethereum sparked reactions within the crypto community, especially among XRP enthusiasts who have been closely following the legal battle between the SEC and Ripple. Attorney Bill Morgan noted that this is Ethereum’s second ‘free pass’ from the SEC in almost six years, contrasting it with Ripple’s treatment by the regulatory agency.
The lawsuit between Ripple and the SEC has been ongoing since 2020, focusing on whether XRP sales are considered securities transactions. While a New York federal court ruled in July 2023 that XRP is not a security, it found Ripple’s institutional sales of XRP to be in violation of the law. The court is expected to determine the appropriate penalty for this violation.
With the SEC wrapping up its investigation into Ethereum, there is speculation about whether the regulator will also resolve its legal battle with Ripple after the final judgment. The possibility of an appeal from either party remains uncertain, but the outcome will shape the future of regulatory enforcement in the crypto space.