SEC to Drop Investigation Into Ethereum Consensys

The U.S. Securities and Exchange Commission is dropping its investigation into whether Ether is a security, Ethereum developer Consensys disclosed on June 19.

Top crypto stories this week: SEC ends Ether investigation, Kraken recovers funds

The U.S. Securities and Exchange Commission has dropped its investigation into whether Ether is a security, Ethereum developer Consensys disclosed on June 19. The investigation focused on whether Ethereum’s 2014 initial coin offering constituted an unregistered securities offering.

Consensys said the SEC’s decision came after it sent a letter to the agency on June 7 asking if it would end its investigation into Ether (ETH), as the regulator approved exchange-traded funds in May premised on ETH being a commodity.

“The Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0,” Consensys stated.

The news comes amid the SEC’s ongoing legal battle with Ripple Labs over XRP, which the agency alleges is an unregistered security. In its own letter to the SEC earlier this month, Ripple highlighted the agency’s contrasting treatment of ETH and XRP, arguing that the SEC’s decision not to pursue action against Ethereum is evidence that XRP is not a security either.

SEC shoots down Ripple's argument for a lower penalty

The U.S. Securities and Exchange Commission (SEC) rejected Ripple’s request for a lower penalty amid its legal battle with the regulatory agency, arguing that Ripple’s proposed $10 million penalty is insufficient compared to the $876.3 million sought.

Ripple had cited the SEC’s settlement with Terraform Labs as a benchmark, but the agency believes the circumstances are not comparable, as Terraform agreed to additional measures like leadership changes and investor repayments.

The SEC’s proposed penalties for Ripple total nearly $2 billion, which includes $198.2 million in prejudgment interest, $876.3 million in civil penalty and another $876.3 million in disgorgement.

Kraken recovers missing funds from CertiK, ending bug bounty saga

Crypto exchange Kraken has recovered missing funds from CertiK following a high-profile bug bounty exploit fiasco.

Kraken confirmed the return of digital assets worth nearly $3 million on June 20, putting an end to the Kraken-CertiK saga. The exchange claimed that a security researcher maliciously withdrew from its treasury after discovering and sharing an existing bug.

Shortly after, blockchain security firm CertiK publicly identified itself as the security researcher, saying it had informed Kraken of an exploit that allowed it to remove millions of dollars from the exchange’s accounts. CertiK also claimed to have been threatened by the exchange’s team.

However, Kraken disputed CertiK’s account of events, alleging that the firm had engaged in “brazen theft” and that its security researcher had exploited a bug in Kraken’s treasury system. The exchange also accused CertiK of attempting to blackmail it by threatening to report the incident to the authorities.

“CertiK, without authorization, exploited a bug in Kraken’s treasury system to siphon off and attempt to launder millions of dollars worth of digital assets,” Kraken stated in a blog post on June 19.

CertiK denied any wrongdoing and claimed that it had acted responsibly by informing Kraken of the vulnerability and offering to help secure the funds. The firm also alleged that Kraken had threatened its employees and that the exchange was now attempting to shift blame.

“We engaged in good faith throughout the process. We informed them of the vulnerability, offered to help secure the funds, and participated in their investigation,” CertiK stated in a blog post on June 20.

The incident sparked a heated debate within the crypto community, with some siding with Kraken and others defending CertiK. The saga also raised questions about the ethics of bug bounties and the role of security firms in the crypto ecosystem.

Ultimately, the two parties were able to resolve the issue and return the stolen funds to Kraken. The details of their agreement and any potential legal ramifications remain unclear.

News source：https://www.kdj.com/cryptocurrencies-news/articles/drop-investigation-ethereum-consensys.html

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