The U.S. Securities and Exchange Commission (SEC) has dropped its lawsuit against Ethereum software developer Consensys, marking a significant victory for the digital asset industry.
Consensys Wins Regulatory Battle
MetaMask creator Consensys has become the latest cryptocurrency and decentralized finance (DeFi) provider to secure relief from an SEC investigation. The federal probe, initiated under the previous SEC leadership, was formally dismissed on Feb. 27.
Consensys founder and Ethereum co-founder Joseph Lubin confirmed that both parties had reached an in-principle agreement to close the case.
SEC’s Allegations Against Consensys
In 2024, the SEC scrutinized Consensys, alleging that the company, through its MetaMask non-custodial wallet, operated as an unregistered securities broker and failed to implement adequate consumer protection measures.
The lawsuit was based on the SEC’s stance that most cryptocurrencies are securities and should be registered accordingly—a position strongly advocated by former SEC Chair Gary Gensler. The SEC had also been conducting a broader investigation into Ethereum’s blockchain, a probe that was abandoned after MetaMask challenged the agency’s claims.
Joseph Lubin Reacts to SEC’s Decision
Lubin welcomed the dismissal, emphasizing that his company was prepared to fight the lawsuit to the end. In a post on X (formerly Twitter), he expressed satisfaction with the outcome, confirming that the SEC would file a court stipulation to officially close the case.
Shifting Regulatory Landscape
The SEC’s decision to drop its case against Consensys follows a broader trend of regulatory shifts in the cryptocurrency sector. Since Donald Trump assumed office, acting SEC Chair Mark Uyeda has replaced Gensler and overseen a wave of case dismissals against major crypto firms.
At press time, the SEC has also dropped legal actions against Coinbase, OpenSea, Robinhood, Uniswap, and Gemini. Reports indicate that the agency’s Crypto Task Force is considering closing its lawsuits against Binance and Tron founder Justin Sun.
What This Means for the Crypto Industry
The SEC’s retreat on multiple fronts signals a potential shift in regulatory policies under the new administration. While uncertainties remain, industry leaders view these developments as a positive step towards fostering innovation and reducing legal pressures on crypto businesses.
With the MetaMask case officially closed, Consensys and other major crypto firms may now focus on expanding their platforms without the looming threat of legal action from the SEC.
