While the SEC has threatened to take Consensys to court over its MetaMask wallet, the company has counter-attacked by filing a complaint against the US regulator. What’s at stake?
Consensys takes the SEC to court
Thursday evening, Ethereum (ETH) developer Consensys announced that it had filed a lawsuit against the Securities and Exchange Commission (SEC). While SEC attacks on players in the ecosystem are a regular occurrence, the reverse is rare enough to warrant mention.
This is in retaliation for the SEC’s growing desire to classify ETH as a security, which would give it legitimacy to regulate the Ethereum ecosystem at its whim. As a result, the company has filed a complaint, highlighting an illegal power grab by the agency:
We don’t take this action lightly, but we feel compelled to act. Our action today is aimed at protecting the Ethereum ecosystem as well as the entire extended decentralized protocol ecosystem. Because Ethereum isn’t just about getting information without authorization. It’s about human ingenuity without permission.
In its complaint, Consensys also explains that it has received a Wells notice from the SEC for its MetaMask wallet, not unlike the threats received by Uniswap (UNI) on the same day:
“On April 10, 2024, the SEC staff sent Consensys a Wells Notice indicating its intention to imminently recommend that the Commission take enforcement action against Consensys for violating federal securities laws via its MetaMask Swaps and MetaMask Staking products. “
Thus, the SEC alleges that through its products, Consensys would act as an unregistered broker-dealer, violating Section 15 (a) of the Exchange Act.
For their part, several key figures in the ecosystem have expressed their support for Consensys, such as Paul Grewal, Coinbase’s General Counsel, and Hayden Adams, Uniswap’s founder:
Sue the Exchange Commission
Thanks @ethereumJoseph and @Consensys for fighting back and defending our industry
We’re tired of the overreach and harassment https://t.co/yDTjjiaJWl pic.twitter.com/vtWxqKxv9n
– hayden.eth (@haydenzadams) April 25, 2024
