Consensys Lawsuit Against SEC Dismissed By Texas Court

According to Blockworks, a Texas court dismissed the lawsuit filed by Consensys against the Securities and Exchange Commission (SEC) and its Chair, Gary Gensler, on Thursday night. The lawsuit, initially filed in April, included significant allegations such as the SEC's investigation into Ethereum and the issuance of a Wells notice to the company behind MetaMask. The April filing stated, 'On April 10, 2024, the SEC staff sent Consensys a ‘Wells Notice’ stating its intent to imminently recommend that the Commission bring an enforcement action against Consensys for violating the federal securities laws through its MetaMask Swaps and MetaMask Staking products.' This notice indicated that the SEC had concluded its investigation and was considering a lawsuit, although it did not guarantee that a suit would be filed. Since the April filing, the SEC has indeed filed its own lawsuit against Consensys, targeting MetaMask Swaps and claiming that Lido and Rocket Pool are unregistered securities. Judge Reed O’Connor, in his decision on Thursday, dismissed the claims regarding MetaMask’s offerings. He noted, 'Similarly, the enforcement actions do not constitute final agency actions. The Notice neither marks the consummation of the agency’s—i.e., SEC’s—decision making process nor establishes Plaintiff’s legal rights or obligations.' The claims related to Ethereum brought by Consensys were dismissed as moot, especially since the SEC announced earlier this summer that it was dropping its investigation into Ethereum while giving the green light to ether ETFs. Both Consensys and the SEC did not immediately respond to requests for comment.