Consensys Lawsuit Settled as SEC Backs Away from Crypto Crackdown

Key Points:

• The SEC has agreed in principle to dismiss Consensys lawsuit, which initially came with allegations of unregistered transactions through MetaMask.
• The decision aligns with the SEC's broader easing of enforcement actions, as several cases against major crypto firms have also been dropped.

The U.S. Securities and Exchange Commission (SEC) has agreed in principle to drop its securities enforcement in Consensys lawsuit.

The decision, announced by Consensys on February 27, follows ongoing legal battles between the company and the SEC over its MetaMask services.

SEC Drops Enforcement in Consensys Lawsuit

Consensys, a key player in blockchain infrastructure, stated that the agreement includes no financial penalties and awaits final approval from the SEC. Founder Joseph Lubin confirmed the development on X, noting that once the SEC submits a stipulation to the court, the case will be officially closed.

The case stemmed from allegations that Consensys had engaged in unregistered securities transactions through its MetaMask Staking and MetaMask Swaps services.

The SEC initially sued the company in 2024, claiming it had generated over $250 million in fees while facilitating transactions without proper regulatory authorization. The agency also accused Consensys of enabling the sale of unregistered securities for liquid staking providers Lido and Rocket Pool since early 2023.

Before the lawsuit involving MetaMassk, Consensys took legal action against the SEC in April 2024, challenging its attempt to classify Ether as a security. The company has maintained that its operations align with existing regulatory frameworks and has advocated for clearer guidelines to govern the crypto industry.

With the Consensys lawsuit now resolved, Lubin emphasized Consensys’ renewed focus on advancing Ethereum and decentralized technologies.

SEC Softens Stance on Crypto Regulation

The SEC’s decision to dismiss the case comes amid a broader easing of regulatory actions against the crypto sector. The shift aligns with recent political developments, as former President Donald Trump has pledged to support the crypto industry.

Over the past three weeks, the agency has dropped or paused at least five other investigations, including those involving Coinbase, OpenSea, Robinhood, Uniswap, and Gemini. Meanwhile, Tron founder Justin Sun is reportedly negotiating a resolution to his legal disputes with the regulator.