- Consensys has convinced a judge to expedite its case against the SEC.
- The accelerated schedule could allow the Ethereum infrastructure provider to get quick answers to critical questions about the SEC’s authority.
- The expedited schedule follows the SEC’s decision to follow through on its Wells Notice with an Enforcement action against Consensys.
Under Gary Gensler‘s leadership, the SEC has launched a regulation-by-enforcement campaign against the crypto industry. However, firms are beginning to fight back amid the unending barrage of lawsuits void of a clear regulatory framework. Among these firms is Ethereum-focused infrastructure provider Consensys.
After receiving a Wells Notice indicating the SEC’s belief that the firm may have broken securities laws with services offered on its MetaMask wallet, the firm went on the offensive, suing the agency in a lawsuit that called into question its claimed authority over crypto asset markets and products.
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Instead of the initially anticipated long wait, Consensys could now be set to get quick answers to the questions raised in the lawsuit following a recent judge’s decision.
Consensys’ SEC Lawsuit Expedited
Consensys has convinced a Texas judge to expedite its case against the SEC. In an X post on Tuesday, July 2, Consensys Senior Counsel Bill Hughes disclosed that U.S. District Judge of the U.S. District Court for the Northern District of Texas Reed O’Connor had granted Consensys’ request to accelerate its case against the SEC.
"Judge O'Connor granted our request that he consider the merits of our case on an expedited basis: whether the SEC has Congressional authority to regulate MetaMask as a securities broker and issuer. Those questions would be considered alongside any arguments the SEC would make that we don't get to bring a case against them," he wrote.
Per the accelerated timeline, the case is scheduled to run from July 29 to November 26, with a ruling likely at the end of 2024 or the beginning of 2025.
The rush to get a decision in the case comes as the SEC last week followed through on its threat to sue the Ethereum-focused developer.
SEC Makes Good on Its Threat
On June 28, the SEC slammed Consensys with a lawsuit of its own, alleging that the crypto firm had violated securities laws with its MetaMask Staking and Swaps services, labeling the wallet an unregistered broker.
In the filing, the agency claimed that MetaMask had facilitated over 36 million transactions in the past four years, of which at least 5 million involved unregistered securities.
The enforcement action against Consensys follows similar lawsuits against Coinbase and Kraken in the past year.
On the Flipside
- Despite the recent court decision to expedite the Consensys case against the SEC, the case remains wide open.
- In the SEC case against Coinbase, the judge dismissed the agency’s claim that the exchange’s wallet service constituted an unregistered broker.
Why This Matters
Following the SEC’s decision to follow up its Wells Notice against Consensys with an enforcement action, the outcome of the crypto firm’s lawsuit against the regulator is now more important than ever. The recent judge’s decision suggests that the result of this case is now likely to come sooner rather than later.
Read this for more on the Consensys case against the SEC:
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