- The price of Ethereum rose after the SEC dropped its probe into Ethereum developer Consensys.
- Investors believe the end of the SEC probe confirms Ethereum’s status as a commodity.
The price of Ethereum (ETH) jumped on news that the Securities and Exchange Commission (SEC) had dropped its probe into the Ethereum developer Consensys.
Ethereum rose by as much as 3.6% on the news.
This bounce in the price of Ethereum went against the general trend of the current crypto slump and even provided some tailwind to other tokens.
Consensys sued the SEC in an effort to force a clear ruling on whether Ethereum was considered a commodity or an unregistered security.
While the SEC has not responded to the suit itself, investors believe that the dropping of the probe into Consensys confirms Ethereum’s status as a commodity.
While Ethereum has followed the general upward trend of crypto, the 2024 price action has been dominated by legal struggles.
Spot ETF Approval Supports Ethereum’s Status as a Commodity
The approval for U.S. exchanges to host spot Ethereum ETFs was the turning point in the larger struggle over Ethereum’s status.
Before the spot Ethereum ETF approval, Bitcoin (BTC) was the only crypto token that was considered to be a commodity by the SEC.
While Ethereum itself was never explicitly labeled an unregistered security like other tokens were, its status was never confirmed.
“The Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0. The decision follows a letter we sent on June 7, asking the SEC to confirm that the May ETH ETF approvals, which were premised on ETH being a commodity, meant the agency would close its Ethereum 2.0 investigation.”
– Official statement from Consensys, an Ethereum developer.
When the SEC opened a probe into Ethereum developer Consensys, they sued the SEC to confirm Ethereum’s status as a commodity.
The dropping of this probe by the SEC appears to confirm Ethereum’s status as a commodity, alongside the earlier spot ETF approval.
However, the SEC has not yet made any official statements about Ethereum’s status, nor have they commented on the dropping of the probe.
Ethereum Price Action in 2024 Dominated by Regulatory News
The price of Ethereum has risen alongside the general upward trend for crypto.
However, legal struggles have led to far choppier price action for Ethereum compared to most other major tokens.
So far, only Bitcoin has officially achieved the murky status of a crypto ‘commodity’ from the SEC.
The confirmation of Ethereum as a commodity would greatly reduce the regulatory burden on Ethereum developers and their projects.
The result of this status would lead to an increase in demand for Ethereum for use in crypto projects and as an investment vehicle.
This would lead to even greater increases in the price of Ethereum relative to other crypto tokens and a significant reduction in the volatility resulting from regulatory uncertainty.
