A Texas federal judge has dismissed a lawsuit filed by blockchain development firm Consensys against the Securities and Exchange Commission and its five Commissioners, including Chair Gary Gensler.
The suit, launched in April, requested official relief by having a court declaring that Ether (ETH) is not a security and that “Consensys’s sales of ETH are not sales of securities.”
Consensys also claimed the SEC opened an investigation into Ethereum and planned to regulate it as a security, noting it had issued them a Wells notice regarding aspects of its MetaMask wallet software.
In a Sept. 19 order, Judge Reed O’Connor dismissed Consensys’ claims over MetaMask, saying “enforcement actions do not constitute final agency actions.”
He added the Wells notice “neither marks the consummation of the agency’s — i.e., SEC’s — decisionmaking process nor establishes Plaintiff’s legal rights or obligations,” and it also doesn’t “impose legal consequences” on Consensys.
O’Connor dismissed as moot Consensys’ claims about the SEC’s investigation into ETH after the firm said in July that the regulator dropped its probe.
“Unfortunately, the Texas court today dismissed our lawsuit on procedural grounds without looking at the merits of our claims against the SEC,” Consensys said in a Sept. 19 X post.
In April 2024, Consensys filed a lawsuit to protect the Ethereum ecosystem from the SEC’s regulatory overreach and stand up for the industry that has been subject to the agency’s reckless enforcement agenda.
Unfortunately, the Texas court today dismissed our lawsuit on…
— Consensys (@Consensys) September 19, 2024
“The SEC dropped its “Ethereum 2.0” investigation after our litigation was filed, and the Texas court today recognized that the SEC already gave Consensys the relief it sought on that critical issue for the Ethereum ecosystem,” it added.
The firm said it would “keep fighting” an SEC lawsuit filed in June where the regulator claims it operated as an unregistered broker and offered and sold unregistered securities through MetaMask Swaps.
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This is a developing story, and further information will be added as it becomes available.
