Why Consensys Is Suing the US Securities and Exchange Commission

The US Securities and Exchange Commission (SEC) has few friends in the crypto industry. The authority wants to classify dozens of cryptocurrencies as securities and thus force them to be regulated. Most recently, there was news that the SEC also wants to direct its activities against Ethereum (ETH), the number one altcoin.

Now, Consensys, one of the biggest crypto companies, has backed Ethereum and explained in a blog post why they are suing the SEC. Three points are highlighted:

1. The SEC had already discussed Ethereum (ETH) in detail in a speech in 2018 in the person of its then board member William Hinman. There, Ethereum was expressly not classified as a security and the infamous “ Hinman Speech ” also plays an important role in the SEC’s trial against Ripple (XRP). Consensys argues that Ethereum correctly falls under the jurisdiction of the Commodity Futures & Trading Commission (CFTC), which has already approved ETH futures. The SEC is overstepping its responsibilities with its investigations into Ethereum.
2. Consensys is behind the popular crypto wallet MetaMask, which has apparently also come into the sights of the SEC. But apps that allow users to transfer and trade Ethereum and other cryptocurrencies are not securities brokers, Consensys said. Rather, MetaMask with additional functions such as digital identity is an indispensable tool for Web3.
3. Consensys is proactively supporting developers and wants to go to court to get the SEC to stay out of “regulation of the Internet.” In fact, the SEC is also stepping up its crackdown on individuals who develop innovative software in the crypto industry. Consensys fears an atmosphere in which developers are leaving the US because the SEC is stifling progress and scaring people.

Consensys’ lawsuit has been made a top priority by CEO Joe Lubin, who himself was one of the founders of Ethereum. The Wachtell law firm, one of the most expensive in the world, was hired. Consensys has chosen Texas as the location for the lawsuit, where the courts are known for prioritizing freedom over regulation. Observers believe it is possible that the case Consensys against SEC will go to the US Supreme Court.

Conclusion: Headwinds for SEC strengthened by Consensys

The days when the crypto industry followed SEC orders without legal opposition are over. Ripple achieved a court victory against the SEC last summer , which is also encouraging for other cryptocurrencies.

With its current lawsuit, Consensys cannot prevent the SEC from continuing its actions against Ethereum. But it must now be clear to the power-conscious authority: The crypto industry is ready to bring out the big guns against over-regulation and obstacles to innovation, even if the corresponding processes can take years and become very expensive.

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(Featured image by elifxlite via Pixabay)

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First published in BLOCK-BUILDERS.DE. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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