Regulation
Consensys and US SEC Reach Agreement To Dismiss MetaMask Lawsuit
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.
Consensys and US SEC To Dismiss MetaMask Lawsuit
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.”
Lubin highlighted the firm’s commitment to defending blockchain developers and emphasized the importance of the case for the wider industry. He also praised Consensys’ legal team, led by Matt Corva, for their work on the case. Lubin expressed gratitude to the SEC’s new leadership for adopting a “pro-innovation, pro-investor path” and stated that Consensys would continue to engage with policymakers.
The dismissal of the MetaMask lawsuit is part of a larger pattern, as the SEC has recently backed off from other high-profile cryptocurrency cases. Legal actions against Coinbase, OpenSea, Robinhood, and Uniswap have also been dropped. These reversals suggest a shift in the SEC’s regulatory approach toward the cryptocurrency industry.
This Is A Developing News, Please Check Back For More
Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
The United States Securities and Exchange Commission (SEC) has clarified that meme coins do not fall under federal securities laws. The agency stated that these digital assets are more like collectibles and are not subject to the regulations that apply to traditional financial instruments. However, the SEC warned that fraudulent activities related to meme coins could still lead to enforcement actions by other federal or state authorities.
US SEC States Meme Coins Are Not Securities
In a statement released on February 27, the SEC’s Division of Corporation Finance stated that meme coins do not qualify as securities under the Securities Act of 1933.
“It is the Division’s view that transactions in the types of meme coins described in this statement do not involve the offer and sale of securities under the federal securities laws,” the statement read.
The agency explained that meme coins do not provide any rights to future income, profits, or assets, which are key factors in determining whether an asset is a security. It also noted that meme coins do not generate yield and are primarily driven by market speculation and social trends.
The agency clarified that since meme coins do not meet the definition of securities, their issuers and traders do not need to register transactions with the agency. The statement emphasized that meme coin buyers and holders are not protected by securities laws.
SEC Warns of Fraud in the Meme Coin Market
Despite the clarification that they are not securities, the SEC warned that fraudulent activities in this sector could still face legal consequences. The agency noted that while it does not regulate meme coins under securities laws, other federal or state agencies may take action against deceptive practices.
Khurram Dara, a lawyer at Bain Capital Crypto, pointed out that misleading promotions, scams, and fraudulent schemes involving meme coins could still be prosecuted. The agency also stated that it would continue to monitor the crypto market for any potential violations of financial regulations.
“The offer and sale of meme coins do not involve an investment in an enterprise nor is it undertaken with a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others,” the statement added.
House Democrats Bill to Restrict Politicians
Before the SEC’s statement, House Democrats had announced plans to introduce the Modern Emoluments and Malfeasance Enforcement (MEME) Act. The proposed bill seeks to prevent public officials, including presidents and their families, from launching or endorsing meme coins.
California Representative Sam Liccardo, who is leading the bill, stated that the legislation aims to stop political figures from profiting off meme coins. The move comes after President Donald Trump launched a meme coin named “TRUMP” shortly before taking office.
The TRUMP token saw rapid gains but later experienced a sharp decline, losing over 50% of its value in the past month. The market reaction led to concerns about political figures using meme coins for financial gain.
Crypto Industry Reacts to SEC’s Clarification
The statement has been welcomed by some members of the crypto industry who have long sought regulatory clarity. Ishmael Green, a crypto attorney at Diaz Reus law firm, said the decision could encourage more investment in the U.S. crypto market.
“This will drive continued investment in the U.S. crypto space, as the vast majority of meme coins launched in the last 12 months with multibillion-dollar market caps have been released on Solana, an American blockchain,” Green stated.
Major crypto exchanges, including Coinbase and Robinhood, saw a slight rise in their stock prices following the agency’s announcement. Market analysts believe that the clarification could allow exchanges to list more meme coins without the risk of regulatory enforcement.
Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
The United States Securities and Exchange Commission (SEC) has voluntarily dismissed its lawsuit with Coinbase Global Inc. over its alleged violations of Federal Securities laws. According to court filings, the case was dismissed with prejudice against the defendant(s).
Coinbase Leads US SEC’s Enforcement Turnaround
According to an X update from Inner City Press based on the court filing, all defendants are now discharged without costs under Rule 41(a)(1)(A)(ii) of the Federal Rules of Civil Procedure. This Coinbase and US SEC case closure was teased about a week ago, setting the new direction for enforcement actions relating to digital currency trading platforms in the industry.
Since the Coinbase versus US SEC case closure was teased, some related enforcement actions have also been closed without further actions. As reported earlier by CoinGape, the regulator has closed the Consensys lawsuit, showcasing a comprehensive shift in the new pro-crypto strategy.
This is a breaking news, please check back for updates!!!
Godfrey Benjamin
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
- Consensys has announced the SEC will drop its case against MetaMask.
- The regulator sued the company over the wallet’s staking feature, alleging securities violations.
- SEC has dropped investigations or cases against Coinbase, Gemini, Robinhood, Uniswap.
The US Securities and Exchange Commission has agreed to drop its case against MetaMask, Consensys founder Joseph Lubin said.
In an announcement posted on X, the Ethereum co-founder noted the regulator and Consensys had agreed to terminate the legal tussle that SEC brought by suing the wallet provider.
“I’m pleased to announce that Consensys and the SEC have agreed in principle that the securities enforcement case concerning MetaMask should be dismissed. Subject to the approval of the Commission, the SEC will file a stipulation with the court that effectively closes the case,” he noted.
The SEC sued Consensys in June 2023, claiming that the company’s staking service via MetaMask violated the US securities laws.
SEC drops numerous crypto lawsuits, probes
Consensys filed a lawsuit against the regulator in April, with the company’s legal team alleging overreach as the SEC reportedly commenced an investigation against Ethereum and for its probe into MetaMask. Per Consensys, the SEC has erred in alleging that Ethereum (ETH) was a security.
The latest move by the SEC adds to a series of developments that have seen it end investigations or drop several cases. It includes legal tussles against Coinbase and Gemini, and investigations against Uniswap, Robinhood and Opensea.
SEC is taking this direction as the new leadership post-Gary Gensler strikes a pro-crypto and pro-innovation stance.
“We appreciate the SEC’s new leadership and the pro-innovation, pro-investor path they are taking. 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,” Lubin added.
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