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Consensys said that the Texas court today dismissed our lawsuit on procedural grounds without looking at the merits.
Key Notes
A Texas federal judge dismissed Consensys' lawsuit against the SEC, which sought to declare Ethereum as not a security.Judge Reed O'Connor ruled that the SEC's enforcement actions and Wells notice related to MetaMask do not constitute final agency actions.While ConsenSys' claims regarding the SEC's investigation into Ethereum were deemed moot.In a major regulatory development, the Texas federal judge has dismissed the lawsuit by blockchain development firm Consensys against the US Securities and Exchange Commission (SEC) and its top boss Gary Gensler.
Filed in April earlier this year, the Consensys lawsuit requested the court to declare that Ethereum is not a “security”. The firm affirmed that “Consensys’ sales of ETH ETH $2 543 24h volatility: 4.7% Market cap: $306.00 B Vol. 24h: $19.55 B do not constitute securities transactions”, thereby preventing the US SEC from taking any enforcement action against its MetaMask wallet software. However, later in June, the SEC ultimately proceeded to pursue the lawsuit.
Additionally, Consensys claimed that the SEC has launched an investigation into the Ethereum cryptocurrency and is willing to regulate it as a security. The securities regulator had issued a Wells notice concerning MetaMask’s swap and staking services.
However, in a Sept. 19 ruling, Judge Reed O’Connor dismissed Consensys’ claims regarding MetaMask, stating that “enforcement actions do not constitute final agency actions”.
The judge also added that the Wells notice “neither marks the consummation of the agency’s – i.e., SEC’s – decisionmaking process nor establishes Plaintiff’s legal rights or obligations”, and it also doesn’t “impose legal consequences” on Consensys.
US Federal Judge Dismisses Consensys Claims
Furthermore, the judge dismissed Consensys’ claims regarding the SEC’s investigation into Ethereum as moot. Consensys had noted that the regulator had dropped its probe after approving Ether exchange-traded funds (ETFs) in May. In a post on the X platform on Wednesday, September 19, Consensys said:
“Our suit against the SEC laid bare the overzealous investigation of Ethereum, and policymakers and the public at large voiced deep concern over the SEC’s investigation of blockchain software development. In a significant win for the industry, the SEC dropped its “Ethereum 2.0″ investigation after our litigation was filed, and the Texas court today recognized that the SEC already gave Consensys the relief it sought on that critical issue for the Ethereum ecosystem.”
The firm stated it would “continue fighting” the SEC’s lawsuit regarding its MetaMask software, where the agency alleges it operated as an unregistered broker and facilitated the offering and sale of unregistered securities through MetaMask Swaps. Consensys is likely to file a motion to dismiss the case.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
