Crypto firm sues SEC to fend off oversight of Ethereum

CRYPTO software firm Consensys sued the US Securities and Exchange Commission (SEC) in an effort to fend off regulation of the Ethereum blockchain and push back against what it called the agency’s “campaign to seize control over the future of cryptocurrency”.

Consensys said in a lawsuit in federal court in Texas on Thursday (Apr 25) that if the SEC is permitted to exert authority over Ethereum and its digital token Ether, it would bring the blockchain to a halt, “crippling one of the internet’s greatest innovations”.

The lawsuit comes amid growing scrutiny of Ethereum by the SEC. In March, the agency demanded information from various companies as part of a review of aspects of Ether, the world’s second-biggest cryptocurrency.

Consensys is asking the court to rule that the token is not a security and is not under the authority of the SEC.

Consensys is a software company founded by Joseph Lubin, who was also a co-founder of the Ethereum blockchain. The firm focuses on building software products on the Ethereum blockchain including digital wallet MetaMask.

The SEC declined to comment on the lawsuit. The Ethereum Foundation, a non-profit supporting the blockchain, did not immediately return a request to comment.

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SEC chair Gary Gensler has said many digital assets are unregistered securities subject to SEC rules, but he has not specified if Ether is part of that group. Bitcoin, the world’s largest digital asset, is the only cryptocurrency that Gensler has definitively said is not a security in his view. BLOOMBERG