SEC Closes Ethereum 2.0 Investigation

On June 18, blockchain technology company Consensys announced that the SEC's enforcement division has concluded its investigation into Ethereum 2.0.2 Despite the closure, the SEC's stance on whether ether, the native token of the Ethereum blockchain, qualifies as a security remains ambiguous.

According to Consensys, the regulator began its investigation into Ethereum last year and the company sued the SEC early this year, claiming that Ether was a commodity and that the SEC lacked jurisdiction to investigate.

While the SEC's chair, Gary Gensler, hasn't definitively labeled ether a security, the Commodity Futures Trading Commission (CFTC) considers it a commodity. The investigation's closure could indicate the SEC leans toward treating ether as a commodity, although the SEC's future actions remain uncertain.

According to Fortune, Consensys’s legal battle with the SEC will continue despite the recent announcement.3 The conflict originally stems from the SEC's scrutiny of Consensys-owned crypto wallet MetaMask, particularly its token-swapping capabilities and staking access. The SEC contends that these functions constitute unlicensed brokerage activities involving unregistered crypto asset securities. Consensys indicated that while the closure of the Ethereum 2.0 investigation is a win, it doesn't fully address the broader regulatory issues.

Hashdex Files for Combined Bitcoin-Ether ETF

With spot bitcoin ETFs already trading in the U.S. and spot ether ETFs seemingly right around the corner, the next development could be a combined ETF featuring both leading cryptocurrencies. Hashdex, a crypto asset manager, is spearheading this effort with a recent filing for the Hashdex Nasdaq Crypto Index US ETF.4

If approved, this ETF would be the first in the U.S. to directly hold both bitcoin and ether. According to Nasdaq's filing with the SEC, the ETF will track the Nasdaq Crypto Index (NCI), which is weighted by market capitalization. Coinbase Custody and BitGo are set to serve as custodians.