SEC Dismisses Suit Against MetaMask Creator Consensys
The U.S. Securities and Exchange Commission (SEC) has officially dismissed its action against Ethereum computer program developer Consensys, its second big victory for the cryptocurrency industry and further cementing the evolving regulatory landscape under new leadership.
Consensys Obtains Regulatory Relief
On Feb. 27, Consensys, the creator of MetaMask, was given relief from a federal investigation initiated by the previous SEC leadership. The action, which claimed Consensys had been an unregistered securities broker, has been dismissed, which is welcome news to the broader crypto community regarding possible future enforcement action.
Consensys co-founder and Ethereum co-founder Joseph Lubin announced that an agreement had been made to resolve the SEC’s investigation. Lubin explained that the choice was made due to a greater understanding of how decentralized finance and blockchain technologies work.
SEC’s Allegations Against Consensys
SEC had accused Consensys of not complying with security regulations, and that MetaMask facilitated unregistered transactions in securities. The suit was based on the presumption that most cryptocurrencies fall under the classification of securities, an argument used by previous SEC Chair Gary Gensler.
The suit also uncovered an independent, one-year SEC inquiry into Ethereum’s blockchain. Consensys shot back with a counter-suit, disputing the agency’s view of the securities laws. The resolution of the dispute offers a hint that the new administration may shift the priorities of its regulators.
Crypto Industry Pushback
Lubin headed to X (formerly Twitter) to celebrate the SEC’s win, stating, “We were committed to fighting this suit to the end but welcome this outcome.” He also reiterated that the cryptocurrency industry would continue advocating for regulatory clarity that fosters innovation and not stifles it.
The dismissal of the suit is part of a broader pattern of case dismissals under a larger trend in regulatory strategy following Donald Trump’s comeback to office. With Mark Uyeda replacing Gensler as acting SEC Chair, the agency has retreated from some of the enforcement actions against crypto firms. The move reflects a potential softening of previous aggressive enforcement policies, offering a more favorable environment for blockchain businesses.
A Broader Pattern of Case Dismissals
The SEC has now dropped charges against a series of crypto businesses, including Gemini, Uniswap, Coinbase, Robinhood, and OpenSea. It appears the Crypto Task Force agency is also focused on closing against Binance, as well as Tron’s founder Justin Sun. This broad trend of the dismissals has been seen pointing to a possibility of a revised approach to regulations in the crypto asset space that is more tempered.
With this latest regulatory retreat, the crypto space sees fresh optimism for fairer regulation in the future, which can serve to catalyze greater institutional investment and mainstream adoption of blockchain technology.
