The United States Securities and Exchange Commission (SEC) has announced the termination of its investigation into whether Ethereum (ETH) qualifies as a security, according to Consensys, a prominent Ethereum development studio.

In a June 19 announcement on X, Consensys revealed that the SEC's enforcement division has formally closed its inquiry into Ethereum 2.0. This decision means that the SEC will not pursue charges alleging that ETH sales constitute securities transactions, a pivotal outcome celebrated by Consensys as a "major win" for Ethereum developers, technology providers, and industry participants.

Consensys attributed the SEC's decision to approve spot Ether exchange-traded funds (ETFs) in May, which implicitly recognize ETH as a commodity rather than a security. The firm highlighted that it had directly petitioned the SEC on June 7 to end its investigation into Ether's status.

Laura Brookover, senior counsel at Consensys, shared the SEC's response letter confirming that the agency does not intend to recommend an enforcement action related to Ethereum.

While Consensys welcomed this development as a positive step, it emphasized that the legal battle is ongoing. In April, Consensys filed a lawsuit against the SEC shortly after receiving a Wells notice regarding potential securities law violations related to its MetaMask crypto wallet. The lawsuit alleges that SEC Chair Gary Gensler and the agency have maintained the position that ETH qualifies as a security since early 2023. According to Consensys, the SEC's Division of Enforcement Director Gurbir Grewal approved an order of investigation into Ethereum's security status on March 28, 2023.

The conclusion of the SEC's investigation marks a significant milestone for Ethereum amidst regulatory scrutiny and legal challenges. Consensys continues to advocate for regulatory clarity and favorable treatment of ETH within the broader digital asset ecosystem, underscoring the importance of ongoing legal proceedings to solidify Ethereum's regulatory status moving forward.