(Bloomberg) -- The Ether token posted its best climb this week amid speculation that US regulatory scrutiny of the blockchain ecosystem underlying the second-largest digital asset may be easing.

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The token rose as much as 2.5% on Wednesday before paring some of the advance to change hands at $3,535 as of 10:45 a.m. in Singapore. The rally was a modest tailwind for market-leader Bitcoin and a range of smaller rivals.

Ether is the coin of the Ethereum blockchain, the most important network for crypto-based financial services. A US Securities and Exchange Commission probe around the Ethereum Foundation highlighted uncertainty about whether Ether is an unregistered security, a status that could dent demand for the digital asset.

In a posting on X, Consensys, a developer of Ethereum, said “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,” Consensys added.

The SEC didn’t immediately reply to a request for comment about the claims from Consensys. The request was sent outside regular business hours. Consensys in April sued the SEC in an effort to fend off regulation of Ethereum.

The agency last month signed off on a proposal by venues run by Cboe Global Markets Inc., Nasdaq and the New York Stock Exchange to list exchange-traded funds investing directly in Ether. Further approvals are needed before applicants such as BlackRock Inc. and Fidelity Investments can debut such products.

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

But SEC Chair Gary Gensler has been ambiguous on whether Ether is a security. Crypto enthusiasts are worried about the token — and potentially projects based on the Ethereum blockchain — falling under the agency’s tough and costly rules.

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

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

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