The SEC’s decision to end its investigation into Ethereum raises questions about the future of other cryptocurrencies.
So Ethereum isn’t a security?
The U.S. Securities and Exchange Commission has informed Ethereum software company Consensys in earlier this week that it has ended its investigation.
This, along with the SEC’s approval of Ethereum ETFs for trading in the U.S., is seen by many as a sign that Ethereum isn’t considered a security.
Some believe this might also mean that other proof-of-stake coins like Solana and Polygon are in the clear, but experts caution against this assumption.
Drew Hinkes, an attorney specializing in digital assets, suggests that this decision likely has little impact on other proof-of-stake coins, because the investigation focused on Ethereum’s unique circumstances, such as its creation and distribution, which differ from those of other tokens.
Consensys had preemptively sued the SEC after receiving a Wells Notice, and the lawsuit revealed the SEC had considered Ethereum an unregistered security for at least a year due to its switch to proof of stake.
Playing with words
Expert thinks the SEC’s shift in perspective regarding Ethereum doesn’t guarantee the same outcome for other cryptocurrencies.
According to Hinkes, the SEC might evaluate other tokens based on how they were initially sold, their technological state, and block validation mechanics.
Matt Corva, a lawyer for Consensys, noted on X that the SEC hasn’t clarified why it now sees Bitcoin and Ethereum as non-securities, leaving uncertainty about other coins.
Carlo D’Angelo, a crypto defense lawyer, also mentioned that the SEC’s careful wording in its letter keeps the status of Ethereum and other proof-of-stake networks unclear.
Not that fast with the celebration
While the happy end of the Ethereum investigation could be a positive sign for the crypto world, experts think there are still some problems.
Sebastian Heine, head of risk and compliance at Northstake, believes this development strengthens some cases but stresses that each coin is unique.
He warns that the SEC remains cautious about cryptocurrencies, so high expectations are irresponsible.
Yes, the SEC’s decision marks a big moment for Ethereum but the whole crypto industry is still in uncertainty.
