ConsenSys Vs SEC: Judge Sets Stage For Potential MetaMask Ruling By 2024 End – Details

In a recent development, ConsenSys, the blockchain software company founded by Ethereum co-founder Joseph Lubin, has been granted an expedited decision by a Texas judge in its lawsuit against the US Securities and Exchange Commission (SEC). The choice will determine whether the SEC can regulate MetaMask, a crypto wallet, as a broker-dealer. 

ConsenSys Lawsuit

ConsenSys lawyers’ request for an expedited decision was approved by Judge Reed O’Connor. The case will evaluate the merits of ConsenSys’ argument on whether the SEC has congressional authority to manage MetaMask as a securities broker and issuer. 

The judge has set a series of deadlines, including the filing of answers by the defendants before July 29, completion of limited issue discovery for dispositive motion by August 16, filing of opening briefs on dispositive motions by September 20, filing of amicus briefs by November 1, and filing of reply briefs by November 26. 

On Monday, the SEC charged ConsenSys with engaging within the unregistered offer and sale of securities through MetaMask Staking and operating as an unregistered broker through MetaMask Staking and MetaMask Swaps. 

SEC Allegations

The grievance alleges that since January 2023, ConsenSys has offered and sold “tens of 1000’s of unregistered securities” for liquid staking program providers Lido and Rocket Pool. These programs involve creating and issuing liquid staking tokens in exchange for staked assets. 

The SEC claims that ConsenSys distributed these programs, engaging within the unregistered offer and sale of securities and operating as an unregistered broker.

The SEC’s grievance asserts that ConsenSys collected “substantial fees” as an alleged “unregistered broker” and conducted “unregistered securities transactions,” potentially exposing investors to risks without the protections provided by federal securities laws. 

Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, emphasized the agency’s commitment to holding bad actors accountable within the securities market, which many experts imagine must have recent laws to encourage innovation and never be regulated by outdated laws because it is on this case. 

Ultimately, ConsenSys’s lawsuit against the SEC has taken a major step forward. A Texas judge has granted an expedited decision on whether the SEC has the authority to manage MetaMask as a broker-dealer

The ruling, expected by the top of the yr or early 2025, will determine the longer term regulatory status of MetaMask and has broader implications for the cryptocurrency industry. 

The day by day chart shows the entire crypto market cap’s valuation at $2.24 trillion. Source: TOTAL on TradingView.com

As of the newest update, the general cryptocurrency market capitalization has once more reached a valuation of $2.24 trillion. The crypto market, spearheaded by Bitcoin (BTC), is displaying signs of recovery since Monday, with BTC maintaining a sideways trading pattern above the $62,000 threshold. 

Conversely, Ethereum is currently trading at $3,410, reflecting a marginal 2% decline in price inside the 24-hour timeframe.

Featured image from DALL-E, chart from TradingView.com 

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