Crypto Token Ether Rallies on Claim About SEC’s Ethereum Probe

(Bloomberg) — Ether token has climbed to its best this week amid speculation that U.S. regulatory scrutiny of the blockchain ecosystem underlying the second-largest digital asset may loosen.

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The token rose as much as 2.5% on Wednesday, with some of the advance changing hands at $3,535 as of 10:45 a.m. in Singapore. This rally has been a moderate tailwind for market leader Bitcoin and a number of smaller rivals.

Ether is the currency of the Ethereum blockchain, the most important network for crypto-based financial services. The U.S. Securities and Exchange Commission’s investigation around the Ethereum Foundation highlighted uncertainty about whether Ether is an unregistered security, a situation that could reduce demand for the digital asset.

“The SEC’s Enforcement Division has notified us that it has closed its investigation regarding Ethereum 2.0,” Consensys, one of Ethereum developers, wrote in a post about X. said.

“The decision follows a letter we sent on June 7 asking the SEC to confirm that the May ETH ETF approvals, based on the assumption that ETH is a commodity, mean the agency will close its Ethereum 2.0 investigation,” Consensys added.

The SEC did not immediately respond to a request for comment regarding Consensys’ allegations. The request was submitted outside normal business hours. Consensys filed a lawsuit with the SEC in April in an attempt to fend off regulation of Ethereum.

Last month, the agency signed off on a proposal from institutions managed by Cboe Global Markets Inc., Nasdaq and the New York Stock Exchange to list exchange-traded funds that invest directly in Ether. BlackRock Inc. Further approvals are needed before applicants such as Fidelity Investments and Fidelity Investments can launch such products.

While Bitcoin is considered a commodity, the SEC argues that most other tokens are unregistered securities that should be subject to its oversight.

However, SEC Chairman Gary Gensler was unclear on whether Ether was a security. Crypto enthusiasts are concerned that the token, and possibly projects based on the Ethereum blockchain, would fall under the agency’s strict and costly rules.

Bloomberg News reported in March that the agency had requested information from companies about deals with the Ethereum Foundation as part of a review of aspects of Ether.

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The Ethereum Foundation’s website describes the organization as a non-profit organization dedicated to supporting Ethereum and related technologies.

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