Ethereum software company ConsenSys has filed a lawsuit with the U.S. Securities and Exchange Commission (SEC). The lawsuit alleges that the SEC seeks to control the future of cryptocurrencies and intends to classify Ethereum as a security.
In its 34-page complaint, ConsenSys alleges that the SEC, under the leadership of Chairman Gary Gensler, has overstepped its regulatory limits. The company highlights previous statements from regulators in 2018 that asserted that Ethereum (ETH) should not be treated as a security.
ConsenSys argues that the SEC's attempt to regulate ETH as a security is wrong because Ethereum lacks the characteristics of a traditional security. The company filed the lawsuit in response to receiving a wells notice from the SEC regarding MetaMask, a product developed by ConsenSys, and is seeking a preemptive declaration that Ethereum is not a security. A Wells Notice is a preliminary letter advising you of a potential regulatory action.
ConsenSys claims that the SEC's enforcement actions against it and others are part of an effort to gain regulatory advantage by punishing those who relied on government assurances that ETH is not a security. . The SEC's position on Ethereum's classification is significant as regulators are taking legal action against a number of crypto companies for violating securities laws through the sale of unregistered securities. Other regulatory bodies, such as the Commodity Futures Trading Commission (CFTC), consider Ethereum to be a commodity.
