YEREVAN (CoinChapter.com) — A U.S. judge dismissed Consensys’ lawsuit against the SEC over Ethereum, citing a lack of final agency action.
Consensys’ Ethereum Lawsuit Dismissed by Judge
Consensys, the company behind the Ethereum wallet MetaMask, had filed a lawsuit against the U.S. Securities and Exchange Commission (SEC). The lawsuit aimed to prevent the SEC from regulating Ethereum as a security. However, on Thursday, a U.S. district judge dismissed the case, stating that the lawsuit was “moot” due to a lack of final agency action by the SEC.
Judge Reed O’Connor explained that Consensys did not present any evidence of final SEC decisions regarding Ethereum. Therefore, he ruled that without such actions, the claim could not be reviewed by the court.
“Because Plaintiff has not identified final agency action that would render the claim fit for judicial review, and because withholding consideration subjects Plaintiff to scant, if any, hardship, the claim lacks a ripe case or controversy,”
he wrote.
SEC Wells Notice on Ethereum Triggers Lawsuit
In April 2024, Consensys received a Wells notice from the SEC, indicating the regulator’s intention to pursue legal action over securities violations tied to MetaMask. In response, Consensys filed a lawsuit to clarify that ETHER should not be considered a security.
Consensys SEC Lawsuit Update Source: @Consensys
The lawsuit claimed that the SEC had internally classified ETHER as a security, despite previous public statements to the contrary. Consensys argued that Ethereum lacks the characteristics of a security and should not fall under the SEC’s jurisdiction.
“The U.S. Securities and Exchange Commission seeks to regulate ETH as a security, even though ETH bears none of the attributes of a security,”
the lawsuit stated.
SEC Drops Ethereum Investigation After Lawsuit
By June 2024, Consensys announced that the SEC had dropped its investigation into Ethereum. However, this was not the end of the legal battle. Later that month, the SEC filed a lawsuit against Consensys over the MetaMask Swaps service, which allows users to stake cryptocurrency. Staking involves locking up crypto assets to maintain a blockchain network, a process the SEC has scrutinized in its efforts to regulate the crypto industry.
ETH SEC Victory Announcement. Source: @Consensys
Consequently, the SEC’s focus on staking services has been part of its broader attempt to regulate the crypto market. The agency claims that staking exposes investors to excessive risk, offering limited protection in return. As a result, this has put companies like Consensys under increasing pressure from U.S. regulators.
The SEC has not responded to requests for comments on the case. However, this dismissal does not mark the end of the conflict between Consensys and the SEC, as the two parties continue to clash over the regulation of cryptocurrency services in the U.S.
ETH’s Price Sees Gains Amid Legal Battle
Even with ongoing legal challenges, Ethereum’s price remains robust. ETH is currently trading at $2,560.96, reflecting a 4.95% increase in the last 24 hours. This demonstrates continued confidence in Ethereum despite its regulatory hurdles.
Ethereum Price Surge. Source: CoinMarketCap
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