Ethereum software developer Consensys has sued the U.S. Securities and Exchange Commission (SEC), fighting against what the firm called an “unlawful seizure of authority” over ETH.
The lawsuit, filed in the United States District Court for the Northern District of Texas, seeks a definitive ruling on whether ETH is a security and aims to prevent the SEC from taking enforcement action against Consensys’ MetaMask wallet’s Swaps or Staking functions, wanting a federal court to deem its staking service does not violate securities laws.
Consensys contends that MetaMask is “simply an interface” that “neither holds customers’ digital assets nor carries out any transaction functions,” thus not functioning as a broker under federal securities law.
The lawsuit further claims that the regulator’s stance contradicts its own past statements, citing former SEC Director Bill Hinman’s 2018 speech classifying Ethereum as a commodity. Additionally, Consensys argues that the SEC is encroaching on the territory of the Commodities Futures Trading Commission (CFTC), which oversees derivatives tied to Ether.
Consensys argues it “built its business against the backdrop of this regulatory consensus,” and said the SEC’s actions “violate the Constitutional requirement of fair notice under the Due Process Clause.”
It adds that the “SEC’s unlawful seizure of authority over ETH would spell disaster for the Ethereum network, and for Consensys,” before leaning on the “major questions doctrine,” a Supreme Court ruling barring federal regulators from dramatically exceeding the scope of their mandates.
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- Source: https://www.cryptocompare.com/email-updates/daily/2024/apr/26/
