Ethereum Developer Consensys Wins SEC Battle Over MetaMask Wallet

• The SEC dropped its investigation into Consensys, marking a shift in crypto regulations under new leadership.
• The lawsuit revealed a year-long SEC probe into Ethereum’s blockchain, which was also abandoned.
• The United States courts dismissed legal cases filed against Coinbase and Uniswap throughout 2024.

Ethereum software developer Consensys witnessed the U.S. Securities and Exchange Commission (SEC) make an official decision to terminate its case. The cryptocurrency sector earned another win after regulatory authorities decided to drop their investigations of crypto operations recently.

Consensys and SEC Reach Agreement

Consensys, the firm behind the popular MetaMask non-custodial wallet, confirmed on February 27 that an agreement had been reached to end the federal investigation. Company founder Joseph Lubin announced that both parties settled the matter in principle, bringing the case to a close.

Allegations Against The SEC had initially investigated Consensys for allegedly operating MetaMask as an unregistered securities broker. The agency claimed the company failed to implement standard consumer protection measures. Regulators pursued this case under the argument that most cryptocurrencies qualify as securities and should be registered accordingly.

Gensler’s Regulatory Stance

During his tenure as head of the SEC Gary Gensler vigorously supported tighter regulations to control the crypto market. The enforcement actions carried out by his position targeted numerous digital asset companies. The security enforcement cases were reverted after new leadership took over at the SEC.

The lawsuit against Consensys also revealed that the SEC had been investigating Ethereum’s blockchain for over a year. This probe was ultimately abandoned after MetaMask’s creator legally challenged the agency’s claims. Lubin expressed confidence in his company’s position, stating that they were prepared to fight until the end but welcomed the case’s dismissal.

Wider Impact on the Crypto Industry

The SEC’s decision to drop charges against Consensys follows a pattern of regulatory shifts. Since Donald Trump took office and Mark Uyeda replaced Gensler as acting SEC Chair, multiple cases against crypto firms have been dismissed.

Consensys is not the only company to benefit from the SEC’s recent policy changes. The agency has also dropped cases against Coinbase, OpenSea, Robinhood, Uniswap, and Gemini. Moreover, the SEC’s Crypto Task Force is reviewing lawsuits against Binance and Tron founder Justin Sun, indicating potential further dismissals.