Ethereum
Consensys Files Lawsuit Against SEC Over Ethereum Regulations
Consensys filed a lawsuit against the United States Securities and Exchange Commission (SEC).
The lawsuit, filed Thursday, aims to stop a looming SEC crackdown on Consensys’ MetaMask wallet and seeks a crucial ruling on the classification of Ethereum’s native token, Ether.
Consensys questions SEC position
THE deposit asserted: “The U.S. Securities and Exchange Commission’s (SEC) threat to regulate Ether as a security would jeopardize the United States’ ability to use Ethereum and similar blockchain technology. »
Consensys is pushing for a Federal Court declaration that Ether is not a security. He argues that any investigation based on ETH being a security would violate the company’s Fifth Amendment rights and the Administrative Procedure Act.
The lawsuit also seeks to clarify that MetaMask, Consensys’ wallet product, does not operate as a broker-dealer under federal law and that its staking service does not violate securities laws.
Consensys received a Wells Notice from the SEC on April 10, indicating the SEC’s intent to pursue enforcement action against the company for alleged violations of the securities laws through its MetaMask wallet product. The complaint also references the SEC’s prior position on Ethereum, citing former Director Bill Hinman’s speech in 2018, which classified Ether as a commodity.
Consensys highlights the inconsistency of the SEC’s approach and points to the Commodities Futures Trading Commission’s (CFTC) jurisdiction over Ethereum derivatives as further evidence of ETH’s commodity status.
He alleges that this change constitutes an “about-face” that contradicts the constitutional requirement for fair notice under the Due Process Clause.
Consensys also invokes the “major issues doctrine,” a legal principle that prevents federal regulators from overstepping their congressional mandates. The company warns of serious consequences for both the Ethereum network and Consensys if the SEC’s actions continue unchecked.
Gensler’s Crypto Crackdown
The lawsuit against the agency comes amid SEC Chairman Gary Gensler’s aggressive crackdown on major crypto players, such as Coinbase and Uniswap.
Gensler’s approach included deliverance subpoenas to companies and developers for documents related to their interactions with the Ethereum Foundation, a nonprofit organization supporting the development of the network.
Critics in the crypto industry are angered by Gensler’s tactics. They argue that the SEC did not provided clear regulatory guidelines tailored to the unique characteristics of blockchain technology. Gensler denies these criticisms, saying existing securities laws are sufficient and accusing the crypto industry of failing to comply with them.
Consensys’ lawsuit, filed in the Northern District of Texas, aligns with similar preemptive legal actions taken by groups like the Blockchain Association and companies like Legit Exchange. Despite these legal actions, Gensler continues to pursue Ethereum’s staking functionality as the basis for the SEC’s recent legal position.