A US Federal Judge has ruled in favor of the US SEC that ConsenSys suit against it has no substance and has tossed it out
A Texas federal judge has decided to side with the Securities and Exchange Commission (SEC) in its case against blockchain development company ConsenSys. Judge Reed O’Connor in the U.S. District Court for the Northern District of Texas in the Fort Worth Division dismissed ConsenSys’ Ethereum case against the SEC.
ConsenSys May Continue Fighting
The judge claimed that “Plaintiff concedes it is not pursuing an APA claim under Count IV. Finally, Defendants’ Motion to Dismiss Plaintiff’s MetaMask for lack of subject matter jurisdiction is hereby GRANTED. Accordingly, this action is dismissed without prejudice.”
He also added that enforcement actions against MetaMask are not final agency actions.
The blockchain company does not think it deserved Judge O’Connor’s verdict. Therefore, it has promised to keep fighting the SEC’s lawsuit over its MetaMask software. The Commission accused Consensys of operating as an unregistered broker, offering and selling unregistered securities through MetaMask Swaps.
The firm is expected to submit a motion to dismiss the case.
ConsenSys filed a lawsuit against the SEC in April, linking it to the agency’s characterization of ETH as a security rather than a commodity like Bitcoin (BTC). The firm also noted that the Commission “trained its sights” on the firm’s Metamask software.
In the same month, an SEC staff member allegedly sent a Wells Notice to ConsenSys, suggesting an incoming enforcement action.
ConsenSys Choose to Pursue Legal Actions Against SEC
The SEC notified the firm of its decision to close its investigation into Ethereum in June.
This move was described as a major win for the broader crypto industry, considering that they were waiting for approval for spot Ethereum ETFs at the time. The closure of the ETH investigation seemed to have paved the way for the offering because a few days later, the regulator approved Ethereum ETFs for trading.
Still, this did not mark the end of the case for ConsenSys as it sought a declaration that its MetaMask offering did not violate securities laws. This was when the Commission struck back with charges of operating as an unregistered broker.
In what seemed like a trend, financial service provider Robinhood and Non-Fungible Token (NFT) marketplace OpenSea also received a Wells Notice from the SEC.
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