ConsenSys, a blockchain software firm, has filed a lawsuit against the US Securities and Exchange Commission (SEC), challenging what it sees as an overreach in regulating Ethereum as a security.
The firm argues that the SEC lacks the authority to regulate global peer-to-peer networks like Ethereum and asserts that the Commodities Futures Trading Commission (CFTC) already oversees derivative products linked to Ether. ConsenSys contends that the SEC’s attempt to reframe its authority over ETH is unlawful.
This legal action follows a Wells Notice from the SEC to ConsenSys regarding the MetaMask wallet, alleging violations of securities laws.
ConsenSys seeks a federal court declaration affirming Ether’s status as a non-security, fearing that a contrary ruling could undermine years of work and billions of dollars of economic value.
This move coincides with reports suggesting that the SEC may not approve spot Ethereum ETFs, with a decision expected on May 23. While SEC Chair Gary Gensler hasn’t directly addressed Ethereum’s classification, he has acknowledged the agency’s jurisdiction over many cryptocurrencies.
In April 2022, Consensys was informed of the SEC investigation into MetaMask, followed by a letter in September 2022 indicating enforcement action plans related to MetaMask Staking products. Consensys received three SEC subpoenas in the past year, with the latest in March.
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