Consensys, a blockchain technology company, has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC). The lawsuit, initiated on Thursday, is aimed at preventing the SEC from taking action against Consensys’ MetaMask wallet. At the heart of the issue is the classification of Ethereum’s native token, Ether.
In its filing, Consensys argues that labeling Ether as a security would hinder the United States’ ability to utilize Ethereum and similar blockchain technologies. The company is seeking a clear declaration from a federal court that Ether is not a security.
Consensys Protecting MetaMask
Consensys also contends that MetaMask, its wallet product, should not be classified as a broker under federal law. Additionally, it asserts that the staking service provided by MetaMask does not violate securities laws.
The lawsuit points out inconsistencies in the SEC’s approach, highlighting former director Bill Hinman’s 2018 speech that classified Ether as a commodity. Consensys argues that the SEC’s recent actions represent a significant shift that contradicts constitutional requirements.
Pushback Against Gensler’s Enforcement
The legal action comes amidst SEC Chairman Gary Gensler’s aggressive stance on crypto regulation. Gensler’s tactics, including subpoenas to firms like Coinbase and Uniswap, have drawn criticism from within the crypto industry.
Critics argue that the SEC lacks clear regulatory guidelines tailored to blockchain technology. However, Gensler maintains that existing securities laws are sufficient and blames the crypto industry for non-compliance.
Consensys’ lawsuit aligns with similar legal actions taken by other groups and companies. Despite these challenges, Gensler continues to target Ethereum’s staking feature as a focal point of the SEC’s recent regulatory efforts.
