- A Texas federal court dismissed Consensys’ lawsuit against the SEC, filed in April 2024 over Ethereum regulations.
- The case was dismissed on procedural grounds, but Consensys noted the SEC dropped its investigation into “Ethereum 2.0.”
- Consensys continues to challenge the SEC’s enforcement actions on MetaMask features, including Swaps and Staking.
A Texas federal court has dismissed the lawsuit filed by Consensys, a blockchain development firm, against the Securities and Exchange Commission (SEC) and its five commissioners, including Chair Gary Gensler.
The company initiated the lawsuit in April 2024 to combat what it described as the SEC’s regulatory overreach regarding Ethereum. The firm sought to protect the Ethereum ecosystem from what it claimed was the agency’s aggressive enforcement strategy, especially targeting blockchain developers.
Consensys expressed disappointment over the dismissal, stating that the Texas court dismissed the case on procedural grounds without considering the merits of its claims.
Despite the setback, the company pointed to a significant achievement: the SEC dropped its investigation into “Ethereum 2.0” shortly after the litigation was filed. The firm viewed this as a win for the industry, noting that the court recognized Consensys had already received the relief it sought on the Ethereum 2.0 issue.
While the lawsuit itself did not proceed as planned, The company remains resolute in its broader mission to defend the rights of blockchain developers across the U.S.
Consensys Continues Legal Battle Over MetaMask Features
The firm has continued its legal battle in Brooklyn, challenging the SEC’s enforcement action regarding its MetaMask software, specifically features like MetaMask Swaps and MetaMask Staking. The SEC’s investigations have focused on whether these features violated federal securities laws.
The legal conflict between Consensys and the SEC began in 2022 when the SEC notified Consensys that it was investigating its MetaMask wallet. Later, the SEC expanded its probe to include Ethereum-based protocols and ETH transactions, key components of the company’s business.
In April 2024, the SEC issued a Wells Notice, indicating it might pursue enforcement actions against Consensys for alleged violations related to MetaMask’s Swaps and Staking features.
In its September 19 ruling, the Texas court granted the SEC’s motion to dismiss the lawsuit, deeming the company’s claims related to Ethereum moot, as the SEC had already dropped that investigation. The court also ruled that the MetaMask claims lacked subject matter jurisdiction, citing their speculative nature and unripe status for judicial review.
Despite the legal challenges, the company remains optimistic. The firm highlights a shifting attitude in Washington toward cryptocurrencies and digital assets, marking this as a pivotal moment for the industry. However, the company stresses the need for continued vigilance as regulatory battles unfold.
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