According to a report from “The Block,” Consensys, the developer of the cryptocurrency wallet MetaMask, is launching a counterattack against the U.S. Securities and Exchange Commission (SEC) regarding the classification of Ether (ETH). The company filed a lawsuit against the regulatory agency in a Texas court on Thursday.
Consensys stated in the lawsuit that it referenced a speech by former SEC Division of Corporation Finance Director William Hinman in 2018, widely known in the cryptocurrency community, where he stated that Bitcoin (BTC) and Ether are not securities. Consensys also mentioned that the Chairman of the U.S. Commodity Futures Trading Commission (CFTC), Rostin Behnam, has declared ETH as a commodity.
Consensys claimed that the SEC has classified ETH as a security and has focused its attention on the company’s MetaMask software. The company mentioned in the lawsuit that SEC officials had earlier this month issued a Wells notice to Consensys, indicating the agency’s plans for enforcement action.
According to a press release, Consensys is seeking a court declaration that ETH is not a security and alleging that the SEC violated procedural law. The company also aims to clarify that it does not act as a broker, nor does it offer or sell securities through the exchange and staking functions of the MetaMask wallet software. Additionally, Consensys is seeking an injunction to prohibit SEC’s investigation or enforcement actions.
Paul Grewal, General Counsel of the cryptocurrency exchange Coinbase, voiced support for Consensys on the X platform on Thursday, denouncing the SEC’s overreach and asserting that ETH is a commodity. The Executive Director of the Blockchain Association also issued a statement in support of Consensys’s lawsuit.