Ethereum bulls, rejoice: Consensys brings good news about the cryptocurrency – and it’s from the SEC.
A few hours ago, software company Consensys took to X (formerly Twitter) to say that United States regulator the Securities and Exchange Commission had just informed Consensys that it’s in the process of concluding and closing the longstanding investigation by the SEC into ETH.
A major win for ETH
Quirkily titled ‘Ethereum survives the SEC’, Consensys described it as a ‘major win’ for Ethereum developers, technology providers, and industry participants, saying that:
The Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0. This means that the SEC will not bring charges alleging that sales of ETH are securities transactions.”
This is significant for the crypto industry, not least because, under the current US laws governing cryptos such as Ethereum, as it means they will not be recognized as ‘securities transactions’ (and enforced and governed as such) by the SEC.
The law around Ethereum, explained
Lowell D. Ness, of international law firm Perkins Coie, explains why this is such an important distinction:
“The Ripple Order gives some interesting insights into the types of transactions that at least the court thinks merits treatment as securities transactions. When the token is being sold to traditional investor types using traditional investment processes and documentation and the investor thesis is clearly to seek appreciation in the token value, then it is apparent that this type of primary sale of tokens should be treated as a securities transaction. But, when the token is trading in highly liquid secondary markets, the regulatory need for exchanges to be regulated like securities markets seems like overkill.”
Essentially, this is about when a major cryptocurrency, with an active enough market, is deemed to be ‘overregulated’ by being treated as a security by the SEC.
“Partly, this is because the clearance and settlement of crypto does not have the same complications and pitfalls that traditional securities have. Many of the same anti-fraud rules should be applicable to front-running and other trading abuses, but the need for every participant to be a licensed broker-dealer is a bit much,” says Ness.
Essentially, it means critical peace of mind for the Ethereum community, especially in relation with continuing in their development work of Ethereum 2.0, and could be seen as a nod of approval, albeit a smaller one, from the regulator.
ETH-USD price today
Unsurprisingly, the news has had a very positive effect on the Ethereum price since breaking.
The ETH-USD price is up $72, more than 2%, today so far, at the time of this article going to press.
All in all, ETH-USD is up by 51% so far this year, rising by over $1200 since January 1st 2024.
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