Consensys sues SEC, challenging its approach to Ethereum and seeking court intervention

The blockchain and web3 development company behind the well-known MetaMask Wallet filed a lawsuit against the agency on Thursday in a Texas court.

"The U.S. Securities and Exchange Commission … seeks to regulate ETH +0.37% as a security, even though ETH bears none of the attributes of a security — and even though the SEC has previously told the world that ETH is not a security, and not within the SEC’s statutory jurisdiction," Consensys said in the complaint.

The question of whether the SEC has jurisdiction over Ethereum has come to the forefront over the past few weeks as reports have come out that the agency is subpoenaing companies that deal with the Ethereum Foundation . In the past, SEC Chair Gary Gensler has skirted the question of whether ether is a security. However, he has noted that many cryptocurrencies are and would fall under his agency's jurisdiction.

Consensys says the SEC has decided that ETH is a security and said the agency has "trained its sights" on the firm's Metamask software. The firm also noted in the complaint that SEC staff sent Consensys a Wells notice earlier this month, meaning a formal notice that the agency plans to bring an enforcement action against them.

"The SEC claims that by offering this wallet software, Consensys acts as a broker and offers and sells securities. But MetaMask is simply an interface — like a web browser — that allows digital asset holders to seamlessly interact with the Ethereum network, including all other users and applications participating on the network," Consensys said in the complaint.

Ultimately, Consensys is asking the court to declare that ETH is not a security and say the SEC violated procedural laws.