Consensys Challenges SEC in Court Over Ethereum Regulatons

By: Eliza Bennet

Ethereum-based software company, Consensys, recently filed a lawsuit against the US Securities and Exchange Commission (SEC). The lawsuit arises from claims that the SEC has exceeded their authority in their attempt to regulate Ethereum (ETH), a popular cryptocurrency.

The lawsuit alleges that the SEC's efforts to control Ethereum through enforcement actions with multiple firms, including Consensys, is nothing short of unlawful overreach. The primary contention of Consensys is that the SEC lacks the legal authority to oversee ETH, user-controlled software interfaces, or the Ethereum blockchain in a wider context.

Apart from this, Consensys is urging the court to affirm that Ethereum is not a security and Consensys is not acting as a broker or selling securities by operating MetaMask. They are also seeking a court declaration that any legal action or investigations on these grounds would surpass SEC's authority.

The case has larger implications as it questions the standing issue of whether SEC treats Ethereum as a security. Many companies and projects involved with the Ethereum's ecosystem have been complying with laws based on this matter's pending verdict.