- A federal court last week dismissed Consensys Software’s lawsuit against the Securities and Exchange Commission
- The court ruled that Consensys’s claims related to Ethereum are moot, and their MetaMask-related claims are “unripe” for judicial review
- The dismissal comes without prejudice, allowing Consensys to refile if circumstances change
A federal judge last week dismissed Consensys Software’s lawsuit against the Securities and Exchange Commission (SEC), ruling that its claims relating to Ethereum are moot following the conclusion of the SEC’s investigation into the project. Consensys sued the SEC in April over its designation of ETH as a security, but the court found the SEC has come to the same conclusion on its own. The judge also found that the company’s claims related to its MetaMask software are not yet ready for judicial review, deeming them “unripe.”
Filing Was “Moot”
Conseneys’ lawsuit portrayed the SEC’s attempts to assert jurisdiction over Ethereum as unlawful and potentially detrimental to blockchain technology at large, with the company arguing that such actions could bring Ethereum transactions in the US to a standstill. This, it added, would jeopardize innovation in the digital asset space.
However, the SEC itself has since found that ETH is not a security, leading to Judge Reed O’Connor of the U.S. District Court in the Northern District of Texas dismissing the case:
The ETH claims are moot due to the investigation’s termination and SEC’s decision not to recommend any enforcement action.
Conensys had also complained about the SEC issuing it with a Wells Notice over ETH staking in its MetaMask wallets, but the court found that Consensys had not yet suffered any legal harm, as the SEC had not made a final decision; Judge O’Connor found that “A declaratory judgment action is ripe only where an ‘actual controversy’ exists.”
The wallet maker was given the chance to re-file its case if and when the SEC presses charges, but by then it will have its own case to fight.
