SEC dismisses lawsuit against MetaMask developer Consensys

The US Securities and Exchange Commission has dropped its lawsuit against Consensys, the developer of the fashionable MetaMask crypto wallet, the institution said connected Thursday.

Separately connected Thursday, the SEC confirmed it had dropped its suit against crypto speech Coinbase. On February 21, Coinbase said the bureau had “agreed successful rule to disregard its unlawful enforcement case.”

SEC Commissioner Hester Peirce cited the pending enactment of the agency’s month-old Crypto Task Force arsenic the crushed for dropping the Coinbase lawsuit. Led by Peirce, that task unit is charged with crafting caller regulations for crypto assets.

On January 21, Donald Trump named Commissioner Mark Uyeda the SEC’s acting chair. Since then, the bureau has embraced crypto, soliciting manufacture input connected forthcoming regulations and rushing to driblet lawsuits and investigations.

“We were optimistic that the caller medication and the caller SEC enactment would beryllium taking each of these argumentation questions and ineligible questions successful a much productive, collaborative direction,” Bill Hughes, Consensys’ elder counsel told DL News.

“In my view, starting successful mid-November the question was however and erstwhile these cases would beryllium much oregon little peacefully resolved, arsenic opposed to if.”

The SEC sued Consensys successful June 2024, alleging its MetaMask Swaps service, which lets users speech 1 cryptocurrency for another, was an unregistered broker of securities.

In addition, the SEC alleged that MetaMask had sold unregistered securities connected behalf of Lido and Rocket Pool, 2 liquid staking services.

Hughes said helium had expected the SEC to driblet its suit aft the apt confirmation of Paul Atkins arsenic its imperishable chair.

Former SEC lawyer and crypto professional John Reed Stark antecedently told DL News the SEC was attempting to disregard outstanding crypto cases earlier Atkins’ confirmation owed to upcoming filing deadlines.

“Otherwise, the SEC would person to authorities successful a tribunal pleading that integer assets are securities, which is anathema to the ethos of Uyeda and Peirce,” helium said.

Hughes declined to speculate connected the SEC’s determination to disregard crypto cases earlier Atkins’ confirmation.

“It’s surely uncommon for immoderate enforcement bureau to beryllium dropping a lawsuit full cloth, conscionable walking distant from it,” helium said.

“But this is an uncommon period, due to the fact that the regulatory animosity from the erstwhile 2 to 3 years was besides uncommon.”

The SEC’s erstwhile chair, Gary Gensler, repeatedly said astir cryptocurrencies were securities conscionable similar stocks and bonds.

As such, they were taxable to the agency’s strict oversight, according to Gensler, arsenic were the companies that fto users bargain and merchantability crypto.

Under his tenure, the bureau sued dozens of crypto companies and executives for alleged fraud, marketplace manipulation, and registration violations.

Industry advocates decried the SEC’s crackdown arsenic regulatory overreach that pushed talented developers and promising companies abroad.

A Consensys spokesperson told DL News that warring the SEC’s suit outgo the institution “tens of millions of dollars.”

“We were ne'er going to settle,” Hughes said.

“We were going to combat this until triumph or, little likely, defeat. But we invited it ending the mode it is due to the fact that we tin determination connected and bash the enactment that we’re present to do.”

Aleks Gilbert is DL News' New York-based DeFi correspondent. You tin scope him astatine [email protected].