SEC Permanently Suspends Ethereum Investigation; Will Ripple be next?

As the SEC closes its investigation into Ethereum, the question remains whether the regulator could take similar action in its multi-year lawsuit against Ripple.

The US SEC is closing its investigation into Ethereum 2.0, saying it will not pursue accusations that some past sales of ETH are securities transactions.

Ethereum survives SEC

Ethereum-focused software company Consensys Inc. announced the development today in a statement titled Ethereum Survives the SEC.

Consensys noted that the decision followed its letter to the SEC Enforcement Unit on June 7, asking whether approving multiple Ethereum spot ETFs, based on the fact that “ETH is a commodity », marks the end of the investigation into Ethereum 2.0.

In response to this investigation, the SEC confirmed that it had completed its investigation into Ethereum 2.0 and did not wish to take any enforcement action.

Commenting on the development, Consensys described the SEC’s decision as a victory for Ethereum developers and industry participants.

Despite this triumph, Consensys highlighted the remaining challenge in ensuring regulatory clarity for Metamask’s staking and exchange services. The company said it should not take action trial for the SEC to declare that these services do not violate securities laws.

XRP Community Highlights SEC Treatment of Ethereum and Ripple

As expected, the SEC’s decision to permanently suspend investigations into Ethereum 2.0 has sparked reactions within the crypto community. In particular, XRP enthusiasts, who have been at the center of the multi-year legal battle between the SEC and Ripple, have reacted to the agency’s latest decision regarding Ethereum.

Pro-XRP attorney Bill Morgan called the decision the second free pass for Ethereum from the SEC in nearly six years. Notably, the phrase “free pass” relates to Ethereum receiving favorable treatment from the regulatory agency.

Members of the XRP community claimed that Ethereum received its first free pass when William Hinman, a former SEC official, declared ETH became a non-security on June 14, 2018. With the SEC not recommending enforcement action against Ethereum, attorney Morgan described the decision as ETH’s second free pass.

Additionally, Attorney Morgan compared the SEC’s favorable treatment of Ethereum with how the regulator has treated Ripple over the years, emphasizing that the different approaches illustrate the agency’s arbitrary approach to the space crypto.

Will the SEC end its multi-year enforcement actions against Ripple

Since 2020, Ripple has been involved in a lawsuit with the SEC regarding whether sales of XRP are considered securities transactions.

In a July 2023 ruling, a New York federal court declared that XRP is not a security, adding that programmatic sales and other coin distributions are not considered investment contracts.

However, the court ruled that Ripple’s institutional sales of XRP violated the law. At this time, the parties are awaiting the court’s decision regarding the appropriate sanction to be imposed on Ripple for this violation.

Although many speculated that the lawsuit could be resolved this year, one of the parties could likely appeal part of the court’s decision.

Last August, the SEC requested to file an immediate interlocutory appeal challenging the decision regarding programmatic sales and other distributions of XRP. However, the court denied this request, directing the SEC to wait until all outstanding issues are resolved.

The remedies dispute represents the only unresolved issue in the Ripple lawsuit, and the court could issue a final ruling at any time. Subsequently, this could allow the SEC to appeal the Second Circuit’s initial decision if it wishes.

As the SEC closes its investigations into Ethereum, the regulator could likely end its years-long legal battle with Ripple after the final ruling. However, it remains to be seen whether the regulator will take this route.

Disclaimer: This content is informational and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the opinions of The Crypto Basic. Readers are encouraged to conduct thorough research before making any investment decisions. Crypto Basic is not responsible for any financial losses.

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