- Consensys, a crypto software firm, has sued the US Securities and Exchange Commission (SEC) to resist Ethereum blockchain regulation, fearing it could stifle innovation.
- Amidst SEC scrutiny, Consensys seeks a court ruling declaring Ethereum’s token, Ether, not a security and beyond SEC jurisdiction, highlighting increasing investigations into their company.
Consensys has filed a lawsuit against the US Securities and Exchange Commission (SEC) tied to the regulation of the Ethereum blockchain, the crypto firm said on Thursday.
Legal battle sparks debate over Ethereum regulation
Crypto software firm Consensys has taken legal action against the SEC in a bid to resist regulation of the Ethereum blockchain. They are pushing back against what they perceive as the SEC’s attempt to assert control over the future of cryptocurrency.
In a lawsuit filed in federal court in Texas on Thursday, Consensys argues that if the SEC gains authority over Ethereum and its digital token Ether, it could potentially disrupt the blockchain, thereby hindering one of the internet’s most significant innovations.
This legal move comes amidst increasing scrutiny of Ethereum by the SEC. In March, the agency initiated a review of aspects of Ether, the world’s second-largest cryptocurrency, by requesting information from various companies.
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Consensys founder complains SEC’s oversight of Ethereum
Joseph Lubin, the founder of Consensys and a co-founder of the Ethereum blockchain, stated that the SEC’s investigations into their company and other contributors to the Ethereum codebase are intensifying. Lubin highlighted extensive requests for documents and testimony related to their involvement with the code and the asset.
“They’ve made extensive requests for documents and testimony regarding our involvement with the code and the asset,” said Lubin.
“Absent any indication from the SEC otherwise, we have no reason but to believe an action against Consensys regarding Ether to be imminent.”
Consensys is seeking a court ruling that declares the token as not a security and falls outside the SEC’s jurisdiction. Additionally, Consensys revealed on Thursday that it had received a Wells notice from the SEC concerning its MetaMask wallet.
SEC didn’t give a positive response
The SEC has chosen not to comment on the lawsuit, while the Ethereum Foundation, a non-profit organisation supporting the blockchain, has yet to respond to requests for comment.
SEC Chair Gary Gensler has previously stated that many digital assets are unregistered securities subject to SEC rules, but he has not explicitly stated whether Ether falls into this category. Bitcoin, the largest digital asset globally, is the only cryptocurrency Gensler has definitively exempted from being considered a security.
