Gushiken Yona
Consensys, a leading blockchain software technology company, celebrated a significant victory as the U.S. Securities and Exchange Commission (SEC) dropped its investigation into Ethereum 2.0, confirming no enforcement action against the company. However, the legal battle continues as Consensys pursues a lawsuit against the SEC seeking regulatory clarity for its MetaMask Swaps and Staking products, highlighting the ongoing struggle for clear regulatory frameworks within the rapidly evolving blockchain industry.
However, the legal battle is far from over. Consensys, headed by Ethereum co-founder Joe Lubin, remains committed to pursuing its lawsuit against the SEC, seeking regulatory clarity for its MetaMask Swaps and Staking products. “Our fight continues. In our lawsuit, we also seek a declaration that offering the user interface software MetaMask Swaps and Staking does not violate the securities laws. It should not take a lawsuit to provide the much-needed regulatory clarity to allow an industry that serves as the backbone to countless new technologies and innovations to thrive – but here we are,” Consensys said in an official statement.
Consensys had initially sued the SEC in April to defend the Ethereum ecosystem and challenge the agency’s authority over ETH, arguing that it is a commodity and therefore outside the SEC’s jurisdiction. At the time, Lubin emphasized the importance of this action to protect not only Ethereum but the entire decentralized protocol ecosystem.
“We don’t take this step lightly, but we feel compelled to act. Our action today is intended to protect the Ethereum ecosystem as well as the entirety of the extended decentralized protocol ecosystem. Because Ethereum isn’t just about information being permissionless. It’s about human ingenuity being permissionless,” the Ethereum co-founder and Consensys CEO said in April.
The SEC’s decision to drop the investigation came after Consensys sent a letter on June 7, 2024, highlighting the recent approval of ETH ETFs based on ether’s classification as a commodity. This prompted the agency to reconsider its position and ultimately conclude the investigation without any charges against Consensys.
In response to this decision, Consensys expressed gratitude while also emphasizing the need for further progress in the realm of crypto regulation. The company stressed the importance of the SEC abandoning its “regulation-by-enforcement” approach in favor of providing much-needed clarity for the industry.
“While we are gratified by the SEC’s decision to stand down on Ethereum, there is more work to be done to protect crypto in the United States. It is imperative that the SEC abandon its unprincipled and opaque regulation-by-enforcement campaign in favor of much-needed regulatory clarity for an industry that serves as the backbone to countless new technologies and innovations, Consensys said.
It added, “The closing of the Ethereum investigation is momentous, but it’s not a cure-all for the many blockchain developers, technology providers, and industry participants who have suffered under SEC’s unlawful and aggressive crypto enforcement regime.”
While the closure of the Ethereum investigation is undoubtedly a momentous occasion, Consensys acknowledges that it is not a panacea for the challenges faced by blockchain developers and industry participants under the SEC’s enforcement regime.
