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Consensys Takes Legal Action Against SEC for ‘Unlawful Power Grab’ Over Ethereum
Consensys, a developer of Ethereum, has filed a lawsuit against the U.S. Securities and Exchange Commission in response to what it deems as an “unlawful seizure of authority” over Ethereum by the federal agency.
The lawsuit aims for a federal court to affirm that ETH is not a security, any investigation based on the notion that ETH is a security would infringe on ConsenSys' rights, that MetaMask is not a broker under federal law, that MetaMask's staking service complies with securities law, and an injunction against the SEC probing or taking enforcement actions related to MetaMask's Swaps or Staking features.
In the filed complaint against the SEC and its five commissioners, Consensys disclosed that it had received a Wells notice on April 10, signaling the SEC's intent to take enforcement action against the company regarding securities law violations linked to its MetaMask wallet. The company refutes the claim that it acts as a broker, asserting that the wallet is merely an interface that does not possess customers’ digital assets or conduct transactions.
The complaint also highlights the SEC's contradiction with its past stance that Ethereum is a commodity, not a security (referencing former director Bill Hinman's 2018 speech), as well as the CFTC's jurisdiction over Ethereum and its derivative products tied to ether.
Consensys argues that its business was established under the understanding that Ethereum was not a security, and the SEC's sudden assertion of authority over Ethereum contravenes the fair notice requirement under the Due Process Clause.
The lawsuit warns of the detrimental impact the SEC's actions could have on the Ethereum network and Consensys.
The SEC declined to comment on the lawsuit.
The suit cites the "major questions doctrine" to limit federal regulators from overstepping their Congressional mandates. Two prior judges dismissed the notion that cryptocurrencies fall under this doctrine in cases involving Terraform Labs and Coinbase.
Consensys filed the lawsuit in the District Court for the Northern District of Texas, aligning with other groups and companies that have taken preemptive legal action against the SEC's treatment of crypto companies or assets as securities.
Recent legal actions by the SEC have targeted crypto exchanges like Binance.US, Binance, and Kraken. Uniswap Labs also disclosed receipt of a Wells Notice from the regulator earlier this month.
UPDATE (April 25, 2024 at 19:41 UTC): Note that the SEC declined to comment.
The lawsuit aims for a federal court to affirm that ETH is not a security, any investigation based on the notion that ETH is a security would infringe on ConsenSys' rights, that MetaMask is not a broker under federal law, that MetaMask's staking service complies with securities law, and an injunction against the SEC probing or taking enforcement actions related to MetaMask's Swaps or Staking features.
In the filed complaint against the SEC and its five commissioners, Consensys disclosed that it had received a Wells notice on April 10, signaling the SEC's intent to take enforcement action against the company regarding securities law violations linked to its MetaMask wallet. The company refutes the claim that it acts as a broker, asserting that the wallet is merely an interface that does not possess customers’ digital assets or conduct transactions.
The complaint also highlights the SEC's contradiction with its past stance that Ethereum is a commodity, not a security (referencing former director Bill Hinman's 2018 speech), as well as the CFTC's jurisdiction over Ethereum and its derivative products tied to ether.
Consensys argues that its business was established under the understanding that Ethereum was not a security, and the SEC's sudden assertion of authority over Ethereum contravenes the fair notice requirement under the Due Process Clause.
The lawsuit warns of the detrimental impact the SEC's actions could have on the Ethereum network and Consensys.
The SEC declined to comment on the lawsuit.
The suit cites the "major questions doctrine" to limit federal regulators from overstepping their Congressional mandates. Two prior judges dismissed the notion that cryptocurrencies fall under this doctrine in cases involving Terraform Labs and Coinbase.
Consensys filed the lawsuit in the District Court for the Northern District of Texas, aligning with other groups and companies that have taken preemptive legal action against the SEC's treatment of crypto companies or assets as securities.
Recent legal actions by the SEC have targeted crypto exchanges like Binance.US, Binance, and Kraken. Uniswap Labs also disclosed receipt of a Wells Notice from the regulator earlier this month.
UPDATE (April 25, 2024 at 19:41 UTC): Note that the SEC declined to comment.
Last edited at：2024/12/16
#ETH#Coinbase#Binance#Ethereum#MetaMask