According to the lawsuit filed by ConsenSys in the U.S. District Court for the Northern District of Texas, the SEC is waging a campaign to “seize control of cryptocurrencies” through enforcement actions. ConsenSys management cited a 2018 SEC report stating that ETH is not a security.
“If the SEC regulates ether, it will spell disaster for Consensys and the Ethereum network. Every ETH owner, including our company, will be wary of violating securities laws when transacting with this altcoin. The ability to purchase ETH and use Ethereum-based services will be closed. The Ethereum blockchain will not be used in the United States, and this will damage one of the greatest innovations on the Internet,” ConsenSys states.
The company continued: the American regulator “targeted” the MetaMask wallet software, with which users can independently store ETH and other cryptocurrencies. The firm said it received a Wells Notice from the SEC on April 10, warning of possible enforcement action related to the MetaMask Swaps and MetaMask Stakes products. In one conference call, the SEC referred to ConsenSys as an unregistered broker-dealer.
In 2023, the company received three legal requests for information related to the acquisition, storage and sale of ETH. ConsenSys said the SEC's actions are “knocking down” industry companies trying to comply with regulations. Therefore, Consensys asked the court to confirm that ETH is not an investment contract under the Securities Act.
Recently, the Blockchain Association and the Crypto Freedom Alliance of Texas (CFAT) also sued the SEC. The plaintiffs claim that the agency exceeded its authority by defining all cryptocurrency platforms under the definition of “dealer.”
Source: Bits
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