Judge Tosses Consensys Suit Against SEC

A Consensys lawsuit seeking regulatory clarity on ETH’s security status and its MetaMask wallet offerings was thrown out by U.S. District Judge Reed O’Connor yesterday.

What’s the Scoop?

• Case Dismissed: The U.S. District Court for the Northern District of Texas has dismissed Consensys’s lawsuit against the Securities and Exchange Commission (SEC) claiming jurisdictional overreach and violations under the Declaratory Judgement Act.
• Moot Argument: Speaking for The Court, Judge O’Connor identified the case’s present lack of merit, highlighting that the SEC already terminated its investigation into ETH’s security status and legal precedent which prohibits Consensys from preempting the issuance of an SEC final decision (i.e.; enforcement action) for potential MetaMask federal securities law violations.

Bankless Take:

Although clarity on Ether’s non-security status was decisively established by the SEC’s approval of spot ETH ETFs earlier this year, potential MetaMask securities violations remain very much at issue for the broader crypto industry. Considering that Consensys is unable to go on the offensive against the SEC’s yet-to-be-issued final decision regarding MetaMask, it is probable the group will find itself playing defense against the agency’s claims in court.