The US Securities and Exchange Commission has dropped its lawsuit against Consensys, the developer of the popular MetaMask crypto wallet, the company said on Thursday.
Separately on Thursday, the SEC confirmed it had dropped its lawsuit against crypto exchange Coinbase. On February 21, Coinbase said the agency had “agreed in principle to dismiss its unlawful enforcement case.”
SEC Commissioner Hester Peirce cited the pending work of the agency’s month-old Crypto Task Force as the reason for dropping the Coinbase lawsuit. Led by Peirce, that task force is charged with crafting new regulations for crypto assets.
On January 21, Donald Trump named Commissioner Mark Uyeda the SEC’s acting chair. Since then, the agency has embraced crypto, soliciting industry input on forthcoming regulations and rushing to drop lawsuits and investigations.
“We were optimistic that the new administration and the new SEC leadership would be taking all of these policy questions and legal questions in a more productive, collaborative direction,” Bill Hughes, Consensys’ senior counsel told DL News.
“In my view, starting in mid-November the question was how and when these cases would be more or less peacefully resolved, as opposed to if.”
The SEC sued Consensys in June 2024, alleging its MetaMask Swaps service, which lets users exchange one cryptocurrency for another, was an unregistered broker of securities.
In addition, the SEC alleged that MetaMask had sold unregistered securities on behalf of Lido and Rocket Pool, two liquid staking services.
Hughes said he had expected the SEC to drop its lawsuit after the likely confirmation of Paul Atkins as its permanent chair.
Former SEC attorney and crypto critic John Reed Stark previously told DL News the SEC was attempting to dismiss outstanding crypto cases before Atkins’ confirmation due to upcoming filing deadlines.
“Otherwise, the SEC would have to state in a court pleading that digital assets are securities, which is anathema to the ethos of Uyeda and Peirce,” he said.
Hughes declined to speculate on the SEC’s decision to dismiss crypto cases before Atkins’ confirmation.
“It’s certainly uncommon for any enforcement agency to be dropping a case whole cloth, just walking away from it,” he said.
“But this is an uncommon period, because the regulatory animosity from the previous two to three years was also uncommon.”
The SEC’s previous chair, Gary Gensler, repeatedly said most cryptocurrencies were securities just like stocks and bonds.
As such, they were subject to the agency’s strict oversight, according to Gensler, as were the companies that let users buy and sell crypto.
Under his tenure, the agency sued dozens of crypto companies and executives for alleged fraud, market manipulation, and registration violations.
Industry advocates decried the SEC’s crackdown as regulatory overreach that pushed talented developers and promising companies abroad.
A Consensys spokesperson told DL News that fighting the SEC’s lawsuit cost the company “tens of millions of dollars.”
“We were never going to settle,” Hughes said.
“We were going to fight this until victory or, less likely, defeat. But we welcome it ending the way it is because we can move on and do the work that we’re here to do.”
Aleks Gilbert is DL News‘ New York-based DeFi correspondent. You can reach him at [email protected]. creator solana token
