SEC versus Consensys

I felt the need to create this topic to discuss how crypto companies are standing up for themselves. So check this out. The SEC recently asked Consensys and a few other firms for documents about Ethereum, trying to classify Ethereum as a security. Also, there’s this: "The SEC is claiming that the MetaMask wallet is acting as a broker-dealer without the proper license, which is against securities laws. Basically, a broker-dealer is a financial entity dealing with securities transactions for clients and sometimes for themselves. They take on the role of either a broker or agent for client orders, or a dealer when trading on their own account." And here’s what’s happening next: Consensys is suing the SEC. Here's the claim: "1. Ethereum hasn’t been designated as a security yet, so the SEC's actions lack legal ground and go beyond their authority. 2. Ethereum is NOT a security, and Consensys isn’t dealing with securities, so the SEC is acting against the 5th Amendment of the US Constitution." Oshurko Ksenia (C) is the lawyer.

I would love to see the SEC get shamed by losing in court.

To be honest I don't understand their point with Ethereum and what they are expected precisely with such strategy. As far as I know, Metamask doesn't only deal with Ethereum, it deals with hundreds, even thousands other coins. So no matter if Ethereum is a security or not at the end. Besides that they've added several features to the app not relying to the initial goal of Metamask. Now you can swap your coins on Metamask and even buy or sell cryptos against fiat currencies. I think it's what SEC blames for actually.

The SEC takes advantage of the complete lack of legislation in the cryptosphere. I cited several cases in which the court and the CFTC consider Ethereum a commodity, but apparently conflicts in American legislation allow the SEC to think differently. Unfortunately, I do not see any attempt at regulation in this market in the USA. In such a situation, the SEC will have enough work to do for many years.

It looks more like abusing the freedom there is in the crypto space and also contradicting their own regulation attempts. This will be a very interesting case to follow and should get as much public attention other crypto related suits have gotten. The SEC has been pushing on crypto related platforms, it will be good if is is met with good resistance this time.

I don't think that such a concept as "freedom" is appropriate in the American market. This market has always worked according to its own rules, and only the largest and strongest companies will remain in the American market. Weaker and smaller companies have already closed under threat of indictment or left the United States.

This could also be only the companies that are willing to lobby their way through legal issues survive, and the res either get hounded out by litigations or bought by the first group of companies. What's most noticable is that start ups in non data related or financial institutions do not get the same negative attentions attention as those which handle lots of data or users finances.

https://www.theblock.co/post/317428/judge-dismisses-consensys-lawsuit-against-sec-over-metamask-and-ethereum-claims?modal=newsletter Judge dismisses Consensys lawsuit against SEC over MetaMask and Ethereum claims Judge Reed O’Connor in the U.S. District Court for the Northern District of Texas in the Fort Worth Division dismissed Consensys’ claims and sided with the SEC on Thursday. The dismissal follows a long back and forth between the SEC and Consensys over the past year. A U.S. district judge has dismissed a case brought against the Securities and Exchange Commission by blockchain and web3 development company Consensys Software Inc. Judge Reed O'Connor in the U.S. District Court for the Northern District of Texas in the Fort Worth Division dismissed Consensys' claims and sided with the SEC on Thursday. "For the reasons stated above, Defendants’ Motion to Dismiss Plaintiff’s ETH claims is GRANTED, and Counts I, II, and III are DISMISSED AS MOOT," Judge O'Connor wrote. "Plaintiff concedes it is not pursuing an APA claim under Count IV. Finally, Defendants’ Motion to Dismiss Plaintiff’s MetaMask for lack of subject matter jurisdiction is hereby GRANTED. Accordingly, this action is dismissed without prejudice."