Consensys Files Lawsuit Against SEC, Seeks Clarity on Ethereum’s Status
Consensys, a prominent backer of the Ethereum blockchain, has filed a lawsuit against the SEC in a Texas federal court. On Thursday, Consensys initiated legal action to preempt an impending SEC lawsuit over features of its popular MetaMask wallet.
Additionally, the lawsuit seeks a court ruling on the issue of whether Ethereum (ETH) should be classified as a security.
Key points:
- Consensys’ legal filing argues that the SEC’s efforts to exert jurisdiction over Ethereum are both illegal and a threat to blockchain technology.
- The lawsuit comes amidst SEC Chairman Gary Gensler’s aggressive enforcement campaign against leading crypto companies, including Coinbase and Uniswap.
- Consensys reveals that the SEC issued a Wells Notice earlier this month, indicating its intention to sue the company over MetaMask’s staking features.
- The complaint seeks a court declaration that Ethereum is not a security and that MetaMask does not operate as an unlicensed broker-dealer.
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Consensys argues SEC’s authority could spell disaster for Ethereum
In its complaint shared by Fortune, Consensys asserts that the SEC’s “unlawful seizure of authority over ETH would spell disaster for the Ethereum network, and for Consensys.”
The company contends that every token holder would fear breaking securities laws when transferring ETH on the network if ETH were considered a security. Consensys also added that it could potentially bring the use of the Ethereum blockchain in the United States to a standstill.
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The lawsuit highlights the growing frustration within the crypto industry over the SEC’s perceived lack of clear rules. Gensler also appears to be using Ethereum’s recent transition to a staking-based consensus mechanism as grounds for the current legal campaign.
The SEC, under the leadership of Gensler, has been ramping up its efforts to control the crypto industry. The commission has also targeted several prominent firms, like Coinbase, Uniswap and Binance.
