In a ruling dated Sept. 19, Judge Reed O’Connor explained that the SEC’s enforcement action against the company is not yet considered a final judgment.
The Wells notice, which the SEC sent in April warning of possible enforcement action against MetaMask’s ether swap and staking services, does not yet impose legal consequences on ConsenSys, the judge said. The agency alleged that the company acted as an unregistered broker by offering and selling unregistered securities through its MetaMask Swaps and MetaMask Stakes products.
O’Connor also called ConsenSys’ claims of an SEC investigation into Ethereum baseless. This is due to the company’s June statements that the regulator had dropped its investigation into the status of the second cryptocurrency after approving spot exchange-traded funds (ETFs) for Ethereum in May. In June, the regulator nevertheless filed a lawsuit against ConsenSys for violating securities laws.
“We filed a lawsuit against the SEC to protect the Ethereum ecosystem from overregulation, as the industry is subject to reckless enforcement actions by the agency. Unfortunately, the Texas court dismissed our lawsuit without addressing the merits of our claims against the US regulator,” wrote ConsenSys management on social network X.
In April, the company filed a lawsuit against the SEC, accusing the commission of attempting to regulate ether as a security. ConsenSys sought to have the court certify that the ethers the company sells are not investment contracts. ConsenSys asked the court to prohibit the SEC from taking enforcement action against the MetaMask crypto wallet software.
In July, Ripple CTO David Schwartz backed ConsenSys, comparing MetaMask’s work to diamond production. He said the company’s efforts do not determine the profits of diamond owners, just as MetaMask’s efforts do not determine the profits of users.
Source: Bits
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