Texas court dismisses Consensys lawsuit against SEC

The Consensys suit was originally filed in April and included the allegation that the SEC had opened an investigation into Ethereum

article-image

Consensys founder Joe Lubin | MoneyConf (CC license)

share

The lawsuit launched by Consensys against the Securities and Exchange Commission and SEC Chair Gary Gensler was dismissed in a Texas court on Thursday night. 

The Consensys suit was originally filed in April and contained some bombshells including the allegation that the SEC had opened an investigation into Ethereum and that the regulator had issued the company behind MetaMask a Wells notice. 

“On April 10, 2024, the SEC staff sent Consensys a ‘Wells Notice’ stating its intent to imminently recommend that the Commission bring an enforcement action against Consensys for violating the federal securities laws through its MetaMask Swaps and MetaMask Staking products,” the April filing said.

The notice gave the company a heads-up that the SEC had concluded an investigation and was mulling a lawsuit, but it didn’t necessarily mean that the regulator would file a suit. 

Though the SEC has, since the April filing, filed its own lawsuit against Consensys. The regulator targeted MetaMask Swaps, and claimed that Lido and Rocket Pool are unregistered securities. 

Read more: The SEC still has it in for Consensys

Judge Reed O’Connor noted that in his decision on Thursday as he dismissed the claims about MetaMask’s offerings.

“Similarly, the enforcement actions do not constitute final agency actions,” he wrote. “The Notice neither marks the consummation of the agency’s—i.e., SEC’s— decision making process nor establishes Plaintiff’s legal rights or obligations.”

The claims around ETH brought by Consensys were dismissed as moot — unsurprising given that the SEC announced it was dropping its investigation into ETH earlier this summer right as it gave the ether ETFs the green light. 

“Unfortunately, the Texas court today dismissed our lawsuit on procedural grounds without looking at the merits of our claims against the SEC,” Consensys said in a statement. “The Texas court today recognized that the SEC already gave Consensys the relief it sought on that critical issue for the Ethereum ecosystem. 

“Outside of court, we have also seen signs of what could be a momentous step change in Washington’s sentiment towards cryptocurrencies and digital assets during a crucial period for US politics. We are on the right path, but must remain vigilant. Consensys is resolved to keep fighting for the rights of blockchain developers in the US as we contest the SEC’s action in Brooklyn.”

The SEC didn’t immediately return a request for comment.

Updated September 19, 2024 at 5:56 pm ET: Added statement from Consensys.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (6).png

Research

In recent months, a number of highly accretive developments were implemented across the protocol to improve fee capture, expand product functionality, and ultimately drive value accrual to the RUNE token, with more upgrades on the immediate horizon. These developments include hiking the minimum swap fee parameter to increase revenue, adding a Burn System Income Lever to reduce the RUNE supply, the addition of COSM-WASM smart contracting and IBC to enable an application layer, new chain integrations, and more.

article-image

Former IRS agent and Binance executive Tigran Gambaryan will remain imprisoned in Nigeria’s Kuje prison

article-image

When Permissionless III wraps on Friday, there will be 26 days left until the 2024 presidential election

article-image

Plus, an update from the ground in Salt Lake City at Permissionless III

article-image

The US regulator accused the crypto market-making firm of acting as an unregistered dealer

article-image

Customers can pay merchants in USDC or USDP on Ethereum, Solana, and Polygon, while US-based merchants are paid in dollars