ConsenSys Sues The SEC To Prevent It ”Arbitrarily” Expanding Its Jurisdiction Over Ethereum

Blockchain software firm ConsenSys filed a lawsuit against the US Securities and Exchange Commission (SEC) because of its “unlawful power grab” in regulating Ethereum as a security.

ConsenSys argued that the SEC lacks the authority to regulate global peer-to-peer networks, and says its regulatory overreach with ETH and other crypto commodities is unlawful.

The firm also argues that the SEC had previously classified Ethereum as a commodity, and noted that the Commodities Futures Trading Commission (CFTC) asserts authority over Ethereum by overseeing derivative products linked to Ether.

The SEC has been reframing its authority over ETH, redefining legal standards and language, to claim oversight over the blockchain, ConsenSys said.

ConsenSys Receives a Wells Notice from the SEC

The lawsuit filed against the SEC comes after ConsenSys received a Wells Notice from the regulator, indicating its intention to take an enforcement action against ConsenSys over the MetaMask wallet. The regulator says that ConsenSys violated securities laws through MetaMask.

The blockchain firm now wants a federal court to declare that Ether is not a security.

“If the SEC succeeds in designating Ether as a security, companies and developers would see years of work squandered and billions of dollars of economic value destroyed,” ConsenSys said.

The ConsenSys lawsuit comes after a Reuters report revealed that the SEC is unlikely to approve spot Ethereum ETFs. The regulator is expected to give a decision on these products on May 23.

Also Read:

  • SEC Seeks Comments On Blackrock’s Ethereum ETF Ahead Of May Deadline
  • SEC Lawyers Reportedly Resign After “Gross Abuse” Of Power In DEBT Box Case
  • SEC Chair Gary Gensler’s Resignation Troll On X Goes Viral With 1.6 Million Views, But He’s Not Done Yet

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