SEC Drops Case Against ConsenSys

The U.S. Securities and Exchange Commission (SEC) is dropping yet another case against an American crypto company, signaling a shift away from the previous “regulation by enforcement” tactics under former Chairman Gary Gensler.

On Thursday, Joe Lubin, CEO of Brooklyn-based crypto software company ConsenSys, announced via an X post that the SEC has agreed to drop its ongoing securities enforcement case against ConsenSys’s MetaMask wallet. This decision comes on the heels of the SEC’s choice to drop its case against crypto exchange Coinbase, which was revealed last week, though it still requires approval from the agency’s commissioners.

Lubin expressed relief at the outcome: “We were committed to fighting this suit until the bitter end but welcome this outcome. No company wants to be the target of agency enforcement, but at the same time, it was our duty and honor to stand up for blockchain software developers in the hour it was most needed, as I’m sure our industry peers who also stood up against regulatory overreach would tell you.”

The SEC had sued ConsenSys over MetaMask last June, alleging that the widely-used wallet tool was operating as an unregistered securities broker engaged in the offer and sale of securities. This lawsuit followed just two weeks after the SEC concluded its investigation into Ethereum 2.0, which ConsenSys had previously contested in court for regulatory overreach back in April 2024.

The SEC’s withdrawal of its enforcement action against ConsenSys comes amid a series of dropped cases and investigations targeting various crypto companies, including Gemini, Robinhood Crypto, Uniswap Labs, OpenSea, and Coinbase. The agency is also seeking to pause ongoing lawsuits against Binance and the Tron Foundation, along with their associated companies and executives.

Currently, the SEC is revising its approach to crypto regulation under the new leadership of Acting Chair Mark Uyeda, who initiated a Crypto Task Force led by pro-crypto Commissioner Hester Peirce one day after Gensler’s exit. In a recent statement, Peirce outlined the SEC’s future plans for crypto regulation and urged companies to be patient while the agency figures out how to “disentangle” itself from existing legal matters.

Lubin voiced appreciation for the SEC’s new leadership and the commitment to a pro-innovation and pro-investor approach: “We will remain deeply engaged with public and private policymakers going forward. Crypto wants the U.S. to address the best interests of consumers and businesses alike, and we are already on our way to making that happen.”

The SEC has declined to comment on these developments.