MetaMask developer Consensys has asked a Texas federal court to declare that Ethereum is not a security, in an effort to fight back against a nationwide enforcement action by the U.S. Securities and Exchange Commission (SEC).
Consensys has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) against the agency’s alleged unlawful attempt to redefine its constitutional powers to include regulation of Ethereum (ETH), which it claims is the second-largest decentralized network in the cryptocurrency space.
According to the blockchain developer, the SEC has wrongly labeled ETH a security and taken a “reckless approach” that will stifle innovation if left unchecked.
Consensys has announced a lawsuit against the U.S. Securities and Exchange Commission (SEC), accusing the SEC of fickleness in its approach to blockchain technology and mistakenly treating the technology and its applications as simple and doomed investment schemes rather than recognizing its true value as a breakthrough technology.
In a 34-page legal filing disclosed on April 25, Consensys argued that the U.S. Securities and Exchange Commission’s (SEC) enforcement action could undermine Congress’ achievements on stablecoin policy and push the technology further outside the United States.
The legal filing is part of a lawsuit filed by Consensys against the SEC, in which Consensys seeks confirmation from the court that the SEC does not have the legal authority to regulate user-controlled software interfaces built on ethereum or the ethereum blockchain.
The document also mentioned that the SEC's actions could have an overall impact on the cryptocurrency industry, including affecting the innovation and practicality of Ethereum, and possibly causing a significant depreciation in the value of Ethereum holders.
In addition, Consensys emphasized that the SEC had previously made it clear that Ethereum is not a security and should not be regulated according to securities standards, and the current change in attitude may have disastrous consequences for the Ethereum network and Consensys.
Consensys said this “creeping SEC regulatory overreach” goes beyond the scope of U.S. capital markets and runs counter to the regulator’s original mandate.
Consensys strikes back
Consensys, the creator of MetaMask, has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) as the agency steps up its litigation against the crypto industry, asking for an additional $158 million to regulate the so-called “Wild West” digital asset ecosystem.
The lawsuit reflects the growing tensions between the crypto industry and regulators, with Consensys seeking to challenge the SEC's regulatory authority over Ethereum, seeking a court declaration that Ethereum is not a security and arguing that the SEC has no legal authority to regulate Ethereum, the user-controlled software interface built on Ethereum, or the Ethereum blockchain.
At the same time, the SEC was accused of taking a “reckless approach” that could stifle innovation if left unchecked. Consensys’s action also shows how cryptocurrency companies are paying attention to the SEC’s recent actions and the proactive steps they are taking to protect their business models and the interests of the industry as a whole.
Consensys’ lawsuit against the U.S. Securities and Exchange Commission (SEC) is a response to a Wells Notice issued by the SEC earlier this month, which suggested that MetaMask could be charged with operating as an unregistered broker-dealer entity.
Consensys has denied the allegations, insisting that MetaMask serves only as an interface application that does not hold customers’ digital assets or perform any transaction functions.
In addition, Consensys asked the court to formally declare that Ethereum (ETH) is not a security and seek to prohibit the SEC from taking any enforcement action against MetaMask's Swaps or Staking services. Consensys believes that the SEC's attempt to treat ETH as a security will infringe on Fifth Amendment rights and violate the Administrative Procedure Act.
The industry is uniting to fight an investigation into the Ethereum Foundation, a nonprofit dedicated to improvements within the ETH ecosystem. As Cointelegraph reported last month, several companies and businesses received voluntary inquiries from an unnamed state agency.
Stakeholders like Coinbase and Kraken are battling Wall Street securities regulator the Securities and Exchange Commission (SEC) in court after being accused of violating federal regulations. Industry supporters and dissenting SEC commissioners like Hester Peirce also insist that the agency has not provided clear rules for the emerging crypto market.
In the SEC's lawsuit against Coinbase, Coinbase insisted that the SEC's allegations lacked rationality and emphasized that it had undergone a detailed review of its business practices by the SEC before its listing.
Moreover, the SEC’s push is particularly detrimental to Coinbase, which generated more than 80% of its revenue in the United States last year and now faces a near existential threat to its business model.
The SEC believes that Coinbase has violated the Exchange Act, the Securities Act and other codes due to a series of "unregistered" behaviors, while Coinbase believes that the current rules of the digital asset industry are imperfect and the SEC's behavior is actually an overstepping of regulatory authority. #Consensys #起诉SEC
