The Crypto Roundup: 29 April 2024

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Cryptocurrency industry giants are uniting behind Consensys, the company behind the popular MetaMask wallet, after its surprise lawsuit against the U.S. Securities and Exchange Commission (SEC).

Consensys accused the SEC of attempting to “seize control over the future of cryptocurrency” and of an “unlawful seizure of authority” over Ethereum, attempting to regulate it as a security.

On social media Hayden Adams, the founder and CEO of leading decentralized exchange Uniswap, thanked Consensys for “fighting back and defending our industry.” The decentralized exchange, it’s worth noting, received earlier this month a Wells notice from the SEC.

A Wells notice is used by the regulator to inform entities of possible enforcement action. After receiving a Wells notice, companies have a chance to write back to the SEC and explain why they should not move forward with a lawsuit.

The SEC has a history of friction with the crypto sector, having filed lawsuits against major players including Binance, Kraken, and Coinbase. In its own lawsuit, Consensys revealed it also received a Wells notice after a lengthy SEC investigation into Ethereum, the network’s move to a Proof-of-Stake consensus algorithm, and MetaMask itself.

Consensys’ lawsuit contends that MetaMask is “simply an interface” that “neither holds customers’ digital assets nor carries out any transaction functions,” thus not functioning as a broker under federal securities law, while also seeking a ruling that Ethereum is not a security.

The lawsuit seeks a court ruling that Ethereum is not a security, effectively invalidating the SEC’s claims. This strategy mirrors recent actions by Coinbase, which is currently embroiled in its own legal battle with the SEC over unregistered securities sales.

In the wake of Consensys’ move Paul Grewal, Coinbase’s chief legal officer, said on social media that it’s “time for the SEC to admit that ETH is still a commodity and thanked Consensys “for standing up against the SEC’s unlawful expansion of authority.”