Consensys Continues Legal Battle with SEC for Regulatory Clarity
Consensys’ head of litigation, Laura Brookover, emphasized the company’s ongoing legal efforts against the SEC, describing the struggle for regulatory clarity as “far from over.”
Lack of Clarity on Ethereum’s Classification
In a June 21 interview with CNBC, Brookover noted that, despite the conclusion of the Ethereum 2.0 investigation, the SEC has not clarified Ethereum’s classification. She reiterated Consensys’ commitment to seeking clear regulations for digital assets.
Ongoing Investigations into MetaMask Features
Brookover highlighted that two SEC investigations are still active, examining whether Consensys violated securities laws through the swap and staking features of its MetaMask wallet. The regulator had previously issued a Wells notice, indicating potential enforcement actions on these matters.
Brookover stated, “Our current plans are to continue fighting for the relief that our lawsuit seeks.”
Seeking Declaration on MetaMask Features
Consensys aims to secure a declaration that the MetaMask features do not breach securities laws, a goal outlined in its April lawsuit.
Conclusion of the First Case
The SEC ended one investigation with a June 18 letter, which focused on whether Ethereum and Ethereum 2.0 are securities. Brookover remarked that the letter only confirmed the SEC would not charge Consensys, failing to provide the clarity sought through the legal case.
Brookover commented, “It disclaimed us drawing any conclusion from it, such as that [the SEC] found that Ether was a commodity and not a security.”
Insufficient Transparency
Brookover argued that the investigation’s conclusion does not sufficiently explain why it was ended or its relevance to other ongoing SEC investigations and enforcement actions. She speculated that pressure from Congress and industry members might have influenced the SEC’s decision but noted the lack of an official explanation.
SEC’s Stance on Ethereum
She suggested that the SEC’s approval of spot Ethereum ETF rule changes on May 23 might be related to its stance on Ethereum.
Brookover criticized the SEC’s regulatory approach, stating, “Regulation by enforcement is completely backward. There should be clarity so that companies can know for sure whether what they’re engaging in is acceptable under the law.”
She concluded that companies currently have to wait for enforcement actions to understand the SEC’s stance, calling for a more collaborative regulatory approach in the crypto sector.
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