A Texas federal judge has dismissed a lawsuit filed by Consensys against the U.S. Securities and Exchange Commission (SEC) and its five Commissioners, including Chair Gary Gensler.
The lawsuit was filed by MetaMask wallet developer in April and alleges that the SEC has been attempting to exert control over the future of cryptocurrency through enforcement actions aimed at regulating Ether as a security.
The lawsuit sought a legal declaration that Consensys’s sales of ETH do not constitute securities transactions.
Consensys claimed that the SEC opened an investigation into Ethereum and was considering regulating it as a security, also issuing the company a Wells notice concerning its MetaMask wallet software.
In a ruling issued on Sept. 19, Judge Reed O’Connor dismissed the claims regarding MetaMask, stating that the SEC’s enforcement actions do not represent final agency actions. He explained that the Wells notice “neither marks the consummation of the agency’s decision-making process nor establishes Plaintiff’s legal rights or obligations,” adding that it does not “impose legal consequences” on Consensys.
The judge also dismissed as moot Consensys’s claims regarding the SEC’s investigation into Ethereum, as the regulator had dropped its probe in July.
“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 post on X (formerly Twitter). The firm noted that the SEC dropped its “Ethereum 2.0” investigation after the litigation was filed, and the court acknowledged that the relief Consensys sought had already been provided.
Despite the dismissal, Consensys said it would “keep fighting” a separate SEC lawsuit filed in June, where the regulator alleges the firm operated as an unregistered broker and offered unregistered securities through MetaMask Swaps.
Consensys argues that the SEC has been pursuing an anti-crypto agenda through ad hoc enforcement actions, calling it a transparent attempt to redefine well-established legal standards and expand the SEC’s jurisdiction via lawsuits.
MetaMask remains the most widely used crypto wallet app, with more than 30 million monthly active users. Last month, Consensys launched pooled staking for the web3 wallet, allowing MetaMask users to stake any amount of ether to contribute to Ethereum network security and earn validator rewards.
