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SEC backs away from Ethereum investigation


Big news for those considering taking a position in Ethereum as the US regulator, the SEC, has said it will now not be pursuing its investigation of Ethereum, this according to Ethereum developer Consensys in the last 24 hours.

It is a big boost for ETH, as the investigation was a dark cloud still hanging over it, even as fund managers are preparing to launch ETH ETFs on US exchanges. This is being hailed as a major win for Ethereum developers, technology providers and industry participants.

The SEC had been taking a hard look at Ethereum, especially in the context of whether or not it should be regulated as a security. Back in March the SEC issued subpoenas to multiple companies as part of what is now being seen as an effort to label Ethereum as a security under US regulatory laws. This prompted litigation from ConsenSys against the SEC.

The SEC had also issued ConsenSys with a Wells notice (a prequel to regulatory action) claiming that the MetaMask crypto wallet it uses was in violation of US securities laws.

The SEC has been on a crusade against cryptocurrencies for some time now. However, intense lobbying of Capitol Hill by Wall Street names heavily in favour of the further development of the digital assets landscape has led to a backlash from other parts of Washington, not least the US Department of Justice. This seems to have led in turn to the landmark approval of Bitcoin ETFs in February.

“The SEC’s decision to drop the Ethereum investigation highlights the agency’s inconsistent and overly aggressive stance towards the crypto industry,” said Manu Choudhary, co-founder of DeFinity Markets, a digital assets ECN in the UK. “This move seems to acknowledge, albeit reluctantly, Ethereum’s utility beyond mere speculation.”

Choudhary said that the adoption of Ethereum by the World Bank and IMF for educational purposes, along with the approval of ETH ETFs, underscores that ETH functions more like a commodity than a security.

“However, the battle ain’t over,” he said. “The outcome of the ConsenSys lawsuit against the SEC, the company behind the MetaMask web3 wallet, is perhaps one of the most pivotal.”

Pantera indicates interest in Bitwise ETF launch

Institutional interest in the slew of Ethereum ETFs currently on the launchpad in the US is picking up rapidly. Bitwise has just said in its latest filing for a projected ETH ETF that Pantera Capital Management could be in for USD 100m at launch. Indications of interest are not, however, binding, but it is reflective of the sort of high grade institutional interest these ETFs are attracting.

Pantera is a specialist fund manager focused on the blockchain. It has been active in the market since 2013 and launched the first cryptocurrency fund in the US when Bitcoin was only trading at USD 65. It has also rolled out the first blockchain-focused venture fund.

Ethereum ETFs are expected to be approved for final market listing at some point this summer, according to the SEC.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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