A U.S. federal judge has dismissed a lawsuit filed by blockchain firm Consensys against the Securities and Exchange Commission (SEC), which sought to challenge the agency’s view of Ethereum (CRYPTO:ETH) as a security.
The lawsuit, initially filed in April 2024, was dismissed on procedural grounds, with the court ruling that the SEC’s actions were not "final" and therefore not subject to judicial review.
Consensys, the developer behind Ethereum’s popular MetaMask wallet, had argued that the SEC was overreaching in its attempt to regulate Ethereum under securities laws.
The company filed the suit after receiving a Wells notice, a warning from the SEC about potential enforcement action related to MetaMask’s staking service, which allows users to lock up cryptocurrency in exchange for rewards.
Consensys contended that the SEC's actions posed a threat to the entire Ethereum ecosystem.
Judge Reed O’Connor ruled that Consensys had not demonstrated that the SEC's actions were final or that the firm faced immediate harm, leading to the dismissal of the case.
“The claim lacks a ripe case or controversy,” O’Connor noted.
Despite the dismissal, Consensys maintained that it had achieved a "significant win" when the SEC dropped its investigation into Ethereum 2.0 after the lawsuit was filed.
The company stated that it would continue to fight against the SEC’s regulatory actions, including ongoing litigation related to MetaMask in Brooklyn, New York.
In a statement following the court's decision, Consensys expressed disappointment that the court did not consider the merits of the case but reaffirmed its commitment to protecting blockchain developers and the Ethereum ecosystem from what it described as the SEC’s "overzealous" enforcement agenda.
At press time, the Ethereum (ETH) price was $2,455.16.