Ethereum survives SEC scrutiny: Enforcement division closes investigation into Ether, Consensys says

Ethereum (ETH) received a free pass from the US Securities and Exchange Commission (SEC) as the regulator decided to drop its investigation into ETH for allegedly selling the token as a security. 

Consensys, an Ethereum developer, shared the news in a tweet on Wednesday. The developer said that the SEC’s enforcement division has notified them that the investigation into Ethereum 2.0 is being closed. The SEC hasn’t officially confirmed the news. 

While the XRP community has slammed the regulator for the “unequal” treatment of the two assets, the news comes as a win to Ethereum holders and the DeFi ecosystem. Ethereum climbed to a high of $3,573 on Wednesday on Binance after the news. 

Ethereum survives the SEC yet again

Ethereum surged to a peak of $3,573 in response to the news of SEC ending its investigation into the second-largest cryptocurrency by market capitalization. ETH price increased nearly 1.5% on Wednesday.

Ethereum’s gains can be attributed to the end of the regulator’s scrutiny of Ethereum 2.0. In March, the SEC had reached out to firms seeking information about the Ethereum Foundations dealings. The Foundation describes itself as an organization, a nonprofit dedicated to supporting Ether and related technologies. 

Consensys, an Ethereum developer, announced that in response to a letter, the agency informed that it was closing its probe into Ether. This comes as a win to ETH holders awaiting the debut of Spot Ethereum ETFs, likely in July, per Bloomberg ETF analysts. 

The developer unveiled the news early on Wednesday, June 19.

The SEC’s probe into Ether was intended to ascertain whether the altcoin is an unregistered security. If Ethereum would turn out to be a security, it could impact the Spot Ethereum ETF, the DeFi ecosystem, Layer 2 and 3 chains and their tokens. 

If Ether was deemed a security, it would have dented the DeFi and crypto ecosystem in a significant way, analysts say. Therefore, the end of the SEC’s probe into the altcoin brings welcome relief to ETH holders. 

On-chain data tracker identifies whale buying

Lookonchain noted that the news of SEC closing its investigation into Ether was followed by a large-wallet investor buying $19.6 million worth of ETH. The whale bought 5,603 Ether, the data showed.

The whale wallet has withdrawn 16,604 ETH (worth around $59 million), at an average price of $3,600 from Binance since May 30, prior to the news of the investigation being closed. A reduction in the asset’s supply on exchanges eases selling pressure and is considered conducive to price gains.