A Texas federal judge has dismissed a lawsuit filed by blockchain development firm Consensys against the Securities and Exchange Commission and its five Commissioners, including Chair Gary Gensler.
The suit, launched in April, requested the court declare that Ether (ETH) is not a security, that “Consensys’s sales of ETH are not sales of securities,” and block the SEC from bringing enforcement action over aspects of its MetaMask wallet software, which it eventually did in June.
Consensys also claimed the SEC opened an investigation into Ethereum and planned to regulate it as a security, noting the agency had issued it a Wells notice over MetaMask’s swap and staking services.
In a Sept. 19 order, Judge Reed O’Connor dismissed Consensys’ claims around MetaMask, saying “enforcement actions do not constitute final agency actions.”
He added the Wells notice “neither marks the consummation of the agency’s — i.e., SEC’s — decisionmaking process nor establishes Plaintiff’s legal rights or obligations,” and it also doesn’t “impose legal consequences” on Consensys.
O’Connor also dismissed Consensys’ claims about the SEC’s investigation into ETH as moot after the firm said in July that the regulator had dropped its probe after approving Ether exchange-traded funds (ETFs) in May.
“Unfortunately, the Texas court today dismissed our lawsuit on procedural grounds without looking at the merits of our claims against the SEC,” Consensys said in a Sept. 19 X post.
In April 2024, Consensys filed a lawsuit to protect the Ethereum ecosystem from the SEC’s regulatory overreach and stand up for the industry that has been subject to the agency’s reckless enforcement agenda.
Unfortunately, the Texas court today dismissed our lawsuit on…
— Consensys (@Consensys) September 19, 2024
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“The SEC dropped its “Ethereum 2.0” investigation after our litigation was filed, and the Texas court today recognized that the SEC already gave Consensys the relief it sought on that critical issue for the Ethereum ecosystem,” it added.
The firm said it would “keep fighting” the SEC’s lawsuit over its MetaMask software, where the agency claims it operated as an unregistered broker and offered and sold unregistered securities through MetaMask Swaps.
Consensys is expected to submit a motion to dismiss the case.
The SEC did not immediately respond to Cointelegraph’s request for comment.
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