SEC to Drop Consensys Lawsuit

Consensys, the crypto software firm behind the Metamask wallet and Linea Layer 2 network, has revealed that the Securities and Exchanges Commission (SEC) is set to drop its legal action against the company.

“Subject to the approval of the Commission, the SEC will file a stipulation with the court that effectively closes the case. We were committed to fighting this suit until the bitter end but welcome this outcome,” Consensys said in a blog post.

The SEC charged Consensys in June 2024 with selling unregistered securities through its Metamask staking service. The former Director of the Enforcement Division at the SEC, Gurbir Grewal, said at the time that “Consensys inserted itself squarely into the U.S. securities markets while depriving investors of the protections afforded by the federal securities laws.” Grewal departed from the SEC in October 2024.

The securities case is not Consensys’ first legal win over the SEC. In April 2024, Consensys sued the SEC over its previous implication that ETH constituted a security, as opposed to a commodity. This investigation was closed in June 2024, shortly after the approval of spot Ethereum ETFs in May.

“We appreciate the SEC’s new leadership and the pro-innovation, pro-investor path they are taking. We will remain deeply engaged with public and private policymakers going forward,” said Joe Lubin, an Ethereum co-founder and the founder of Consensys.

After the departure of SEC chair Gary Gensler on Jan. 20, Mark Uyeda was named acting chair of the organization, and has immediately loosened the regulatory stranglehold that the previous administration had on the crypto industry. The agency recently abandoned its investigation of Uniswap and dropped lawsuits against crypto exchanges Coinbase and Gemini.