Consensys and the U.S. Securities and Exchange Commission (SEC) have reached an agreement in principle to dismiss the securities enforcement case concerning MetaMask. The resolution is subject to the approval of the Commission, after which the SEC will file a stipulation with the court to officially close the case.
According to a recent filing, the case against MetaMask marks the sixth crypto-related lawsuit that the SEC has decided to back down from. Consensys, the company behind MetaMask, expressed relief at the outcome.
Joseph Lubin, CEO of Consensys, stated, “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.”
The SEC originally sued Consensys in June 2024, alleging that the company’s MetaMask wallet functioned as an unregistered securities broker. The lawsuit accused the firm of earning over $250 million in fees from digital asset swaps and staking services. The dismissal of the case follows a series of legal reversals involving crypto firms, signaling a regulatory shift under new SEC leadership.
The SEC’s decision to drop the MetaMask lawsuit is part of a broader change in approach toward crypto regulation. The agency has also withdrawn cases against several other firms, including Coinbase, Uniswap, Gemini, OpenSea, and Robinhood Crypto and Binance’s case got paused for 60 days.
Concurrently, Consensys attorney Bill Hughes attributed this shift to changes in leadership at the SEC and the evolving stance of the agency. “The litigation team on their side understood that the SEC was going to be moving in a new direction,” Hughes said. He also noted a “tenor change in conversations post-election” between Consensys and the SEC.
Acting SEC Chair Mark Uyeda, who took over following Gary Gensler’s departure, has initiated a revised regulatory strategy. The agency created a Crypto Task Force led by Commissioner Hester Peirce, who has advocated for a more innovation-friendly approach.
Consensys, moreover, had previously sued the SEC in April 2024, arguing that the agency was attempting to regulate Ethereum as a security. The lawsuit aimed to challenge what the company described as regulatory overreach. Lubin credited this legal action as a key factor in the SEC’s decision to drop its Ethereum investigation in June 2024.
Consensys’ legal team pointed to past statements from former SEC Chair Gary Gensler, which suggested Ethereum was not considered a security in 2018. The firm argued that a sudden change in classification would create uncertainty and could criminalize transactions involving ETH.
The SEC’s retreat from enforcement actions as a result has been noted across the crypto industry. Many firms had pushed back against what they saw as an aggressive regulatory stance under previous leadership.
Lubin in addition emphasized that Consensys remains committed to engaging with regulators to develop a balanced approach to crypto oversight.
“We appreciate the SEC’s new leadership and the pro-innovation, pro-investor path they are taking,” he stated.
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