- Judge dismissed Consensys’ lawsuit against SEC, citing lack of final agency action.
- Consensys vowed to continue fighting SEC’s regulatory stance on Ethereum and blockchain developers.
As a seasoned researcher with a keen interest in the intersection of law and technology, I find this development intriguing yet unsurprising. The dismissal of Consensys’ lawsuit against the SEC on procedural grounds is indeed disappointing, but it underscores the complexities inherent in navigating the legal landscape of blockchain technologies.
Recently, a Federal Judge in Texas made an unexpected move by dismissing a case brought forth by the blockchain company, ConsenSys, against the Securities and Exchange Commission (SEC). This case included not only the SEC itself but also its commissioners, such as Chairman Gary Gensler, among the named parties.
Details on Consensys’ lawsuit
In April, a lawsuit was submitted to the Northern District of Texas, alleging that the Securities and Exchange Commission (SEC) was trying to assert control over the cryptocurrency sector by employing forceful regulatory measures.
The firm contended that the Securities and Exchange Commission’s (SEC) actions, particularly classifying Ethereum [ETH] as a security, were inconsistent with previous statements. They highlighted that regulatory rulings dating back to 2018 had already determined that ETH did not qualify as a security.
Additionally, the company claimed that the Securities and Exchange Commission (SEC) initiated an examination of Ethereum, indicating their intention to oversee this digital asset.
Furthermore, they pointed out that MetaMask received a Wells notice from the SEC regarding their swap and staking functions. This has sparked concerns over a possible change in regulatory approach.
O’Connor dismisses the lawsuit — why?
On September 19th, Judge Reed O’Connor dismissed Consensys’ claims regarding MetaMask, explaining that “decisions made in enforcement actions are not regarded as conclusive or definitive governmental actions.
He added,
Since the Plaintiff hasn’t pointed out a definite decision by the agency that could be challenged in court, and since not receiving immediate resolution doesn’t cause significant problems for the Plaintiff, the case doesn’t currently present a legal issue that can be decided by a judge.
In her remarks, Judge O’Connor pointed out that the Securities and Exchange Commission (SEC) notice given to Wells Fargo doesn’t mark the end of their deliberation process nor does it specify the legal duties or entitlements of the defendant.
He emphasized that it does not impose any legal consequences on Consensys.
Additionally, O’Connor dismissed Consensys’ claims regarding the SEC’s investigation into Ethereum.
After the company announced in July that the SEC had ended its investigation, he considered the arguments as no longer relevant or important, since the approval of Ether exchange-traded funds (ETFs) by the SEC in May had taken place.
Consensys expresses frustration
After the ruling was issued, Consensys shared its reaction to X (formerly Twitter), stating:
As a crypto investor, I’m disheartened to share that the Texas court has chosen to dismiss our case against the SEC based on technicalities, rather than delving into the substance of our allegations.
The company communicated that their lawsuit against the SEC highlighted their perception of an excessive probe into Ethereum by the regulatory body.
Previously, they rejoiced over the Securities and Exchange Commission (SEC) ending its inquiry into “Ethereum 2.0”, considering it a significant triumph for the sector, and an acknowledgement by the Texas court that the relief the company sought had previously been granted.
Moreover, it was noticed that there could be a change in Washington’s viewpoint regarding cryptocurrencies and digital assets. This hinted at a promising development during a significant period in American politics.
Seeing this unexpected turn of events, the company reinforced its stance by stating,
ConsenSys remains determined to continue advocating for the rights of blockchain developers in the United States, as we challenge the Securities and Exchange Commission’s (SEC) actions taking place in Brooklyn.
Therefore, it’s unclear if ConsenSys will live up to anticipations by submitting a motion to discard the case or opt to carry on contesting the SEC instead.
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2024-09-20 15:04