Crypto industry heavyweights are lending their support to Consensys after the Ethereum giant launched a preemptive strike against the SEC on Thursday.
Consensys, the company behind the MetaMask crypto wallet, filed a lawsuit against the SEC, alleging the regulator is trying to “seize control over the future of cryptocurrency” and is overreaching in its attempts to regulate Ethereum. (Disclosure: Consensys is one of 22 investors in Decrypt.) The company claims the SEC plans to regulate Ethereum as a security—which, up to now, the regulator has yet to state publicly.
“Thanks [to the founder of Consensys and the rest of the team] for fighting back and defending our industry,” Uniswap founder and CEO tweeted yesterday. “We’re tired of the overreach and harassment.”
The SEC has a long and contentious relationship with the crypto industry, filing multiple lawsuits against industry leaders such as Binance, Kraken, Uniswap, and Coinbase. So this reversing of the tables was welcomed with open arms by figures in the space who took to Crypto Twitter to express their delight.
Sue the Exchange Commission
Thanks @ethereumJoseph and @Consensys for fighting back and defending our industry
We’re tired of the overreach and harassment https://t.co/yDTjjiaJWl pic.twitter.com/vtWxqKxv9n
— hayden.eth 🦄 (@haydenzadams) April 25, 2024
The SEC hit Uniswap with a Wells notice earlier this month, alleging the decentralized exchange had broken securities laws. A Wells notice is a letter that the SEC sends to individuals or companies to inform them it plans to take enforcement action and file a lawsuit.
In its own lawsuit against the regulator, Consensys revealed that it too had received a Wells notice from the SEC after a years-long investigation into Ethereum, the network’s transition to proof of stake following the merge, and the Metamask crypto wallet, specifically.
Consensys’s preemptive lawsuit seeks to get a court to agree that Ethereum is not a security, thereby nullifying the SEC’s claims. It’s a move others in the industry have attempted recently as well, including Coinbase.
The San Francisco-based crypto exchange is currently tied up in legal battles with the SEC regarding the alleged sale of unregistered securities. In the wake of the Consensys announcement, Coinbase Chief Legal Officer Paul Grewal took to Twitter to express his thoughts.
I know ETH is a commodity. You know ETH is a commodity. The CFTC knows ETH is a commodity. It’s time for the SEC to admit that it still knows ETH is a commodity too. No more games. Thank you to @Consensys for standing up against the SEC’s unlawful expansion of authority. https://t.co/8w7A4PBwUK
— paulgrewal.eth (@iampaulgrewal) April 25, 2024
“It’s time for the SEC to admit that it still knows ETH is a commodity too. No more games.” Grewal said, “Thank you to Consensys for standing up against the SEC’s unlawful expansion of authority.”
Neither Binance nor Kraken—both still fighting their own SEC court battles—immediately responded to Decrypt’s request for comment.
Edited by Stacy Elliott.
