The company warned that the SEC reversing a position it had held since 2018 on Ether as a security could “spell disaster” for the network and drive innovation to a halt in the U.S.
Software development company Consensys filed a lawsuit against the United States Securities and Exchange Commission (SEC) and its five commissioners over claims they plan “to regulate ETH as a security.”
In an April 25 filing in U.S. District Court for the Northern District of Texas, Consensys alleged the SEC had orchestrated a campaign “to seize control over the future of cryptocurrency” with enforcement actions aimed at regulating Ether (ETH) as a security. The company cited the SEC’s record — also referring to Chair Gary Gensler’s statements — of declaring ETH was not a security as early as 2018, warning of the potential ramifications of the commission changing its position after firms had built businesses based on regulatory precedent.
“The SEC’s unlawful seizure of authority over ETH would spell disaster for the Ethereum network, and for Consensys,” said the filing. “Every holder of ETH, including Consensys, would fear violating the securities laws if he or she were to transfer ETH on the network. And the ability of anyone new to acquire ETH to use Ethereum’s repository of decentralized applications and services would be extinguished. This would bring use of the Ethereum blockchain in the United States to a halt, crippling one of the internet’s greatest innovations.”