- The judge dismissed Consensys’ lawsuit against SEC, citing the agency’s lack of final action.
- Consensys vowed to continue fighting the SEC’s regulatory stance on Ethereum and blockchain developers.
In a surprising legal development, a federal judge in Texas has dismissed a lawsuit filed against the SEC by blockchain company Consensys. The lawsuit also named the commissioners, including Chairman Gary Gensler.
Details about Consensys’ lawsuit
The lawsuit, filed in April in the Northern District of Texas, accused the SEC of trying to dominate the cryptocurrency landscape through aggressive enforcement actions.
The company argued that the SEC’s actions, including targeting Ethereum [ETH] as certainty, contradicting previous statements. They pointed out that regulatory precedents from 2018 had stated that ETH was not a security.
The company also claimed that the SEC had launched an investigation into Ethereum, indicating that it intended to regulate the asset.
Additionally, they noted that the SEC had issued a Wells notice regarding MetaMask’s swap and staking features. This raised concerns about a possible shift in regulatory position.
O’Connor dismisses the lawsuit – why?
Judge Reed O’Connor dismissed Consensys’ allegations regarding MetaMask on September 19. to report that “enforcement actions are not considered final agency actions.”
He added:
“Because plaintiff has not identified a definitive agency action that would make the claim amenable to judicial review and because withholding consideration subjects plaintiff to little or no hardship, the claim lacks a ripe case or controversy.”
Judge O’Connor further noted that Wells’ notice issued by the SEC does not conclude the agency’s decision-making process or define the plaintiff’s legal rights or obligations.
He emphasized that it does not entail any legal consequences for Consensys.
Additionally, O’Connor has dismissed Consensys’ claims regarding the SEC’s investigation into Ethereum.
He deemed the claims “disputable” after the company revealed in July that the SEC had dropped its investigation following the approval of Ether Exchange-Traded Funds (ETFs) in May.
Consensys expresses its frustration
After the ruling was made, Consensys shared its response to X (formerly Twitter), stating:
“Unfortunately, today the Texas court dismissed our lawsuit on procedural grounds without addressing the merits of our claims against the SEC.”
The company said the lawsuit against the SEC exposed what it believed was exaggerated research into Ethereum.
Previously, they had celebrated the SEC’s decision to drop its investigation into Ethereum 2.0. They considered it a major victory for the industry and an acknowledgment by the Texas court that the relief sought by the company had already been achieved.
Moreover, they observed a possible shift in Washington’s attitude towards cryptocurrencies and digital assets. This marked a positive change at a crucial time for American politics.
Seeing this unexpected turn of events, the company strengthened its position by stating:
“Consensys is committed to continuing to fight for the rights of blockchain developers in the US as we challenge the SEC’s action in Brooklyn.”
So it remains to be seen whether Consensys will live up to expectations by filing a motion to dismiss the case or deciding to continue fighting the SEC.
Credit : ambcrypto.com
