Texas Court Dismisses Consensys’ Lawsuit Against Securities and Exchange Commission

Todaysgist, News – The U.S. Securities and Exchange Commission (SEC) has added Consensys to its list of crypto investigation targets, prompting the tech incubator to sue it for overreach in federal court.

Since regulators closed their Ethereum investigation earlier this year, a Texas judge ruled that the lack of immediate harm meant the lawsuit was without merit.

“Because withholding judgment entitles plaintiffs to little, if any, relief, the claims lack a mature case or controversy,” U.S. District Court Judge for the Northern District of Texas Reed O’Connor wrote, as quoted by Yahoo Finance.

In other words, since there was no clear threat to Consensys in the future, there was no point for the judge to consider it.

“In a significant victory for the industry, the SEC dropped its investigation into Ethereum 2.0 after our lawsuit was filed, and a Texas court today recognized that the SEC has granted Consensys the relief it requested on an issue critical to the Ethereum ecosystem,” the company said in a post on X.

Consensys argues that its lawsuit opens an overbroad investigation into Ethereum, while policymakers and the wider public have voiced deep concerns about the SEC’s probe into blockchain software development.

However, an SEC spokesman declined to comment on the dismissed case.

When Consensys sued the agency in April 2024, it asked the court to declare that Ethereum’s ether (ETH) is not a security, making any investigation into Consensys based on the idea that the token is a security an infringement on the company’s rights.

After withdrawing from the ETH investigation, the SEC followed up with charges against Consensys in late June 2024, alleging that the company’s MetaMask service acted as an unregistered securities broker.

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