Consensys Loses Legal Battle Against SEC Over Ethereum Regulation

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Consensys Loses Legal Battle Against SEC Over Ethereum Regulation
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The lawsuit filed by Consensys, the software giant behind Ethereum, against the United States Securities and Exchange Commission (SEC) has been dismissed by a US district court. The decision came last Thursday. At the time, Judge Reed O’Connor concluded that the company’s allegations had no legal relevance. This is because the regulatory agency’s actions were not considered final.

According to the judge’s ruling, Consensys did not identify any definitive action by the SEC that would justify a judicial review of the case. Furthermore, the court determined that the company would not be significantly impacted by the dismissal of the judicial review at this time.

The dispute between Consensys and the SEC has been going on for some time. In April 2024, Consensys filed a lawsuit after receiving a “Wells Notice” from the SEC. The notice indicated that the agency planned to sue the company for alleged securities violations related to MetaMask, one of the most popular Ethereum wallets.

The company sought an official statement from the SEC that Ethereum was not a security, contrary to what the company claimed was the agency’s internal understanding.

Court dismisses Consensys lawsuit against SEC

However, in June 2024, the SEC backed off its investigation into Ethereum. However, it soon sued Consensys over its MetaMask Swaps platform, which allows users to “stake” cryptocurrencies. This is a process that involves locking up assets to help keep the blockchain network running, with the potential for rewards. The SEC argues that such a service poses excessive risks to investors without adequate protection.

Consensys, a leading developer of decentralized applications (dapps) on the Ethereum network, released a statement following the court ruling, expressing its disappointment.

“Our lawsuit was dismissed based on procedural issues without considering the merits of our claims,” a company spokesperson said.

Additionally, Consensys noted that the lawsuit helped expose what it considers an overblown SEC investigation into Ethereum and noted that after the lawsuit was filed, the SEC dropped its investigation into “Ethereum 2.0.”

Despite the legal defeat, Consensys said it will continue to fight what it sees as the SEC’s overregulation of the blockchain industry.

“We are on the right track, but we need to remain vigilant,” the company concluded.

Consensys Loses Legal Battle Against SEC Over Ethereum Regulation

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Consensys Loses Legal Battle Against SEC Over Ethereum Regulation

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Consensys Loses Legal Battle Against SEC Over Ethereum Regulation

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