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Consensys Sues SEC Over Ethereum Inquiry

Ethereum

Ethereum (ETH) has been under investigation by the SEC for a year. The SEC has been researching Ethereum as a potential security since 2023.

Last week, Consensys, which is a software developer, sued the SEC, which has brought Ethereum into the media. They are angry with the conduct of the SEC aimed at them, but the investigation started in early 2023.

After Gurbir Grewal, the Division of Enforcement director of the SEC, gave the green light for the Ethereum trading investigation in March 2023, the entire thing fell apart. They moved on with subpoenas and testimony.

During a Congressional hearing, Securities and Exchange Commission (SEC) Chairman Gary Gensler evaded answering whether Ethereum was a commodity or a security. The SEC has already started probing Ethereum as a security, but they were not saying it.

Consensys’ legal argument contains two fundamental nodes. First, they reject Ethereum’s security status, stating that the inquiry by the SEC is unwarranted. They also point out that the SEC penalized their MetaMask product, which is intended to infer a broker-dealer relationship. A Wells warning was sent to them by the SEC, telling them, “We might come after you.” Ethereum is not part of this Wells drama.

Ethereum was not the only legal dispute in 2023. More than 10 assets were considered by the SEC as securities against Coinbase and Binance.Ethereum avoided that fate.

Yet, in 2018, the SEC changed the melody. Bill Hinman, the former CFO, stated that ETH, similar to Bitcoin, was not a security. As of today, the SEC seems to be pondering whether the merge update of ETH Aputs it in the security category.

READ:  New Security Warning for Trezor Bitcoin Wallet Users!

The background of ETH is also a part of this legal dispute also includes Ethereum’s background. What is currently being questioned about Consensys is the proof-of-stake updates of ETH and the operations, which include acquisitions and sales. Security sales, as per the SEC, happened before the merger of ETH in 2018.

To add humor to this drama, Consensys is not sleeping. What they’re fighting is to keep the SEC from interfering with ETH. After the SEC Wells warning about a MetaMask wallet crackdown, they started their legal counterattack.

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