Consensys, the technology firm behind major Web3 projects like MetaMask and Infura, has filed a lawsuit against the U.S. Securities and Exchange Commission in an attempt to protect Ethereum from what it sees as the agency’s overreaching regulatory maneuvers.
At the heart of the dispute is the SEC’s approach towards Ethereum and its native token, ETH.
Consensys argues that the SEC is unlawfully extending its regulatory reach in an attempt to designate Ether a security, threatening the operational freedom of the Ethereum ecosystem. This approach, according to Consensys, could “make it impossible for developers in the U.S. to build on Ethereum.”
“Ethereum is a world-changing technology, and Ether itself has the potential to be a significant driver of the U.S. economy of the future,” said Consensys founder Joe Lubin. “Unlawful SEC regulation, however, threatens to jeopardize this potential and impedes the U.S.’s ability to use blockchain technology as the basis for countless new innovations and technologies – even as other nations race ahead.”
Consensys is asking the court to affirm that the SEC lacks the authority to regulate Ether, Ethereum-based software interfaces, and the blockchain as a whole. Key arguments made in the complaint include the assertion that Ether is not a security but a commodity and that user-controlled software interfaces, such as Consensys’ MetaMask wallet, should not be treated as securities brokers.
“Our action today is intended to protect the Ethereum ecosystem as well as the entirety of the extended decentralized protocol ecosystem. Because Ethereum isn’t just about information being permissionless. It’s about human ingenuity being permissionless,” wrote Lubin in a blog post.
With the legal battle now underway, Consensys is calling upon the Ethereum community to join the cause at defendethereum.us.
