A Texas court has dismissed the lawsuit filed by blockchain software company Consensys against the U.S. Securities and Exchange Commission (SEC). The case, initiated earlier this year, challenged the SEC’s alleged regulatory overreach and its attempts to classify Ethereum (ETH) as a security. The dismissal follows the SEC’s decision to drop its investigation into Ethereum in June 2024.
The lawsuit was first launched by Consensys in April, stating that the SEC was trying to destabilize Ethereum by stripping its native token, ETH, of its classification as a commodity. Regarding the regulator’s approach, the company stated that such an approach was detrimental to the development of cryptocurrencies, especially in the future. However, after the SEC ended its investigation on Ethereum, Consensys continued with the legal battle, arguing that the sector could still suffer from excessive regulation.
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Court Decision and SEC’s Action
Thursday, a federal judge, Reed O’Connor, sided with the SEC and dismissed all allegations made by Consensys. The court stated that the SEC’s enforcement actions could not be said to be final agency action. During the trial, the court also noted that the SEC’s notice of investigation did not set the final position of the regulator or any legal obligations for Consensys. Consequently, there were no more reasons for the consideration of the lawsuit.
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However, after the court ruling, Consensys was not happy with the decision made by the court. On X, the company noted that the court threw out their case, leaving all the fundamental issues in their case pigeonholed. Specifically, the blockchain platform underlined its willingness to continue the promotion of blockchain technology and its activities in the context of the emerging new generation of cryptocurrencies.
Consensys had in the past focused on the need to react to what it referred to as regulatory aggression. As much as the SEC closed its investigation into Ethereum, the firm maintained its dissenting on the general regulatory framework of the crypto market.
Conclusion
The court’s dismissal marks the end of this particular legal battle between Consensys and the SEC. While the regulator’s decision to drop its Ethereum probe appears to have played a significant role in the court’s ruling, Consensys remains committed to pushing back against strict regulations. The company has vowed to continue advocating for the crypto industry’s rights amidst ongoing regulatory challenges.
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Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. He writes extensively on topics such as blockchain, cryptocurrency, tokens, and more for top publications such as Coingape, Coin Edition, and The Coin Republic. His goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.