Texas Court Dismisses ConsenSys Lawsuit Against SEC

A federal judge in Texas dismissed ConsenSys’s lawsuit against the U.S. Securities and Exchange Commission (SEC) and its five members, including Chairman Gary Gensler.

In April, the firm sued the SEC over the “regulation of ETH as a security.” The claims alleged that the agency orchestrated a campaign “to seize control over the future of cryptocurrency” through enforcement actions.

ConsenSys also reported the initiation of an investigation by the regulator into Ethereum and receiving a notice of potential enforcement actions related to MetaMask wallet products.

In a ruling dated September 19, Judge Reed O’Connor dismissed the company’s claims, stating that “enforcement actions are not final agency actions.”

According to him, a Wells notice “does not mark the end of the decision-making process” by the SEC and “does not impose legal consequences” on ConsenSys.

O’Connor also dismissed claims regarding the SEC’s investigation into ETH as unfounded.

In April 2024, Consensys filed a lawsuit to protect the Ethereum ecosystem from the SEC’s regulatory overreach and stand up for the industry that has been subject to the agency’s reckless enforcement agenda.

Unfortunately, the Texas court today dismissed our lawsuit on…

— Consensys (@Consensys) September 19, 2024

“Unfortunately, the Texas court dismissed our lawsuit on procedural grounds, without addressing the substance of the claims against the SEC. Our actions against the regulator exposed excessive investigation into Ethereum, and policymakers and the public have expressed deep concern […]”, ConsenSys stated.

As a positive outcome, the firm highlighted the conclusion of the agency’s investigation into Ethereum 2.0. The agency took this step after the organization sent a letter requesting clarification of the asset class when approving spot ETH-ETFs.

The company stated that it “will continue to fight” the SEC lawsuit regarding MetaMask software, which the regulator filed in late June.

Previously, the Blockchain Association and the Texas Crypto Freedom Alliance challenged the Commission, accusing it of “capricious rulemaking” and “erroneous attacks” on the digital asset industry.

Back in April, the largest decentralized exchange, Uniswap, received a warning from the SEC about a potential lawsuit.