Consensys Initiates Legal Action Against SEC, Contests Its Approach To Ethereum
In Brief
Consensys initiated legal action against the SEC aiming to safeguard Ethereum’s integrity and ensure continued access for its community of developers, market participants, and institutions.
Blockchain software company Consensys initiated legal action against the US Securities and Exchange Commission (SEC) with the aim of safeguarding Ethereum’s integrity as a blockchain platform and ensuring continued access for its extensive community of developers, market participants, and institutions.
The rationale for the decision was detailed by the company in a post on the social media platform X. Consensys emphasized its view that the SEC should refrain from extending its jurisdiction arbitrarily to encompass regulating the development of Web3 by incorrectly categorizing ETH as a security. Additionally, Consensys asserts that the SEC’s current approach is causing disruption to the community involved in building or managing systems running on Ethereum.
Consensys noted that it has observed that the commission has frequently altered its stance on blockchain technology, often portraying it and its applications as a superficial investment scheme rather than recognizing the promising potential it has.
Consensys Receives Wells Notice, Asserts SEC Labels ETH As Security
During the last few weeks, the issue of the SEC’s jurisdiction over Ethereum has come to the forefront, particularly as the agency has been issuing subpoenas to firms related to the Ethereum Foundation. While SEC Chair Gary Gensler has previously avoided directly addressing whether ETH is a security, he has acknowledged that numerous cryptocurrencies may indeed fall within the purview of his agency’s jurisdiction.
Consensys has asserted that the SEC has recognized ETH as security and has indicated its focus on its MetaMask software. Additionally, SEC staff issued a Wells notice to Consensys in April, signaling formal notification of the agency’s intention to pursue enforcement action against the company.
In April 2022, Consensys was notified by the SEC’s enforcement division that its staff was conducting an investigation into MetaMask. This was followed by another letter in September 2022 indicating the commission’s intention to pursue enforcement action against the company for alleged violations of regulations, including those related to MetaMask Staking products. Consensys has been served with three subpoenas by the SEC throughout the last year, with the fourth, most recent one issued in March.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
