Ethereum infrastructure developer Consensys has filed a response to the U.S. Securities and Exchange Commission’s claims that it violated federal securities laws, adding to its lawsuit against the agency.
The SEC previously accused Consensys’ cryptocurrency wallet, MetaMask, of operating as an unregistered broker and issuer of securities.
Consensys completely refutes the SEC’s claims and criticized the SEC and its chairman, Gary Gensler, for what it described as an unconstitutional attack on the decentralized finance ecosystem. Response submitted by the court reconfirmed SEC’s Litigation Position and Complaint.
This action is just the latest step in the SEC’s latest campaign to seize control of the future of blockchain and cryptocurrency, one of the world’s fastest-growing and most innovative technologies. The SEC is attempting to impose and insert regulatory authority into this technology. Participation in this cryptographic architecture on its own is not supported by law. That argument must fail.
ConsenSys Response to SEC Lawsuit
Before becoming the subject of an SEC investigation, Lubin’s company sued the SEC over its Ethereum (ETH) investigation. The agency’s prosecutors concluded the investigation and immediately filed a complaint against the MetaMask creator. The SEC alleged that MetaMask facilitated illegal securities trading and that the staking service violated financial regulations.
Consensys countered with regulators to determine whether the law grants regulatory oversight to the SEC. Bill Hughes, an attorney for Consensys, said U.S. Judge O’Connor approved an expedited schedule for the case.
Meanwhile, CEO Joseph Lubin announced layoffs due to regulatory battles and macroeconomic factors, with Consensys reducing its workforce by 20%.
Some companies under pressure from SEC lawsuits may see the upcoming U.S. general election as a potential advantage. Digital asset companies have donated more than $190 million to cryptocurrency-focused super PACs like Fairshake, more than any other industry.
Republican candidate Donald Trump has said he would fire Gensler in January 2025 if elected. The SEC’s legal action could be temporarily halted if commissioners deadlock. Conversely, Gensler could remain in office until 2026 if Democrat Kamala Harris wins.