As reported by CoinDesk, the value of Ethereum (ETH) surged following reports that Consensys had received communications from the U.S. Securities and Exchange Commission (SEC) indicating the conclusion of the agency's inquiry into the technology incubator company and a decision not to pursue enforcement action.
According to reports, the SEC informed Consensys, the developer of the MetaMask wallet among other products, that it would not be taking any enforcement actions as outlined in correspondences sent to the company's legal representatives on Tuesday. A blog post from Consensys confirmed that the SEC was "closing its investigation into Ethereum 2.0."
Although the letters were labeled "Re: In the Matter of Ethereum 2.0 (C-08950)," they did not explicitly reference the blockchain associated with the second-largest cryptocurrency by market capitalization.
One of the letters stated, "We have concluded the investigation in the above-referenced matter. Based on the information we have as of this date, we do not intend to recommend an enforcement action by the Commission against your client, Consensys Software Inc."
Furthermore, the letter emphasized that the conclusion of the investigation should not be construed as a definitive indication that no enforcement action will ever be pursued. It cited a Wells Notice explainer on the SEC website, highlighting the discretionary nature of any further action by the SEC staff. “The Commission is instructing its staff that in cases where such action appears appropriate, it may advise a person under inquiry that its formal investigation has been terminated. Such action on the part of the staff will be purely discretionary on its part for the reasons mentioned above. Even if such advice is given, however, it must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff’s investigation of that
particular matter.”
A second letter echoed the language regarding the conclusion of the inquiry and also expressed disagreement with certain statements made by Consensys' attorneys in a letter to the SEC seeking clarity on ETH's status as a security in light of the SEC's approval of specific spot Ethereum exchange-traded fund applications.
Consensys previously filed a lawsuit against the SEC in April, which alleged that the regulator was investigating the possibility of Ethereum, post-merge, being a security.