- The SEC dropped its lawsuit against Consensys marking a major shift in US crypto regulation and enforcement.
- Consensys’ legal fight pushed the SEC to drop its Ethereum investigation easing concerns for the crypto industry.
- The decision allows Consensys to focus on blockchain growth while signaling a new US stance on digital assets.
The US Securities and Exchange Commission (SEC) has dropped its lawsuit against Consensys, the blockchain firm behind MetaMask. MetaMask was accused of violating security laws with its staking and digital asset swap services. Ethereum co-founder and Consensys founder Joseph Lubin said that the SEC agreed to filing a motion to dismiss the case. The decision is still pending approval from the commission.
The lawsuit accused the company of making over $250 million in fees via its staking and swap services. This claim was part of a wider target on crypto companies like Uniswap, Robinhood Crypto, and Gemini. The SEC’s decision to drop the case follows recent shifts in regulatory priorities.
Regulatory Shift and Changing Leadership
Legal experts believe the SEC’s decision reflects changes in leadership and regulatory direction. Consensys attorney Bill Hughes stated that discussions with the SEC took a different tone after the US elections. He attributed the shift to new leadership and the pro-crypto stance of the Trump administration. The SEC’s approach to cryptocurrency has changed in recent months, leading to several dropped enforcement actions.
Consensys filed for legal action against the SEC to dispute the regulator’s control over Ethereum operations in April 2024. The company argued that classifying Ether as a security would create legal barriers for cryptocurrency transactions. Lawyers from Consensys referenced past declarations by former SEC Chair Gary Gensler from 2018 which indicated that Ether had no security status.
What This Means for Ethereum and Crypto
The SEC concluded its Ethereum investigation in June 2024. The legal dispute raised concerns about the future of Ethereum and broader crypto regulations in the US. Consensys can focus on developing its blockchain products since the lawsuit has been dismissed.
Industry leaders view this as a positive step for Ethereum and the crypto sector. The SEC’s decision signals a shift in how digital assets may be regulated moving forward. Many in the industry will now watch closely to see how the SEC approaches cryptocurrency under its new leadership.
