Breaking News: Texas Court Dismisses ConsenSys Lawsuit Against U.S. SEC

The federal court dismissed the case, stating that the primary issue had already been settled, despite ConsenSys claiming that the U.S. securities regulator is overstepping its authority.

A Texas federal court ruled that ConsenSys’ lawsuit against the Securities and Exchange Commission was unnecessary, as the initial legal threat had been resolved.

However, ConsenSys remains in an ongoing legal dispute with the U.S. securities regulator over MetaMask.

The U.S. Securities and Exchange Commission temporarily included ConsenSys on a list of crypto investigation targets, leading the tech incubator to file a lawsuit in federal court, accusing the agency of overreach.

However, since the regulator ended its Ethereum investigation earlier this year, a Texas judge ruled that the absence of any immediate threat made the lawsuit unnecessary.

Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas stated in a Thursday filing that the case “lacks a ripe case or controversy” because ConsenSys faces little to no hardship by withholding consideration. In other words, with no immediate threat to ConsenSys, there’s no reason for the court to intervene.

Consensys commented on X, saying, “In a major victory for the industry, the SEC dropped its ‘Ethereum 2.0′ investigation after our lawsuit was filed, and the Texas court acknowledged that the SEC had already provided the relief Consensys was seeking on this critical issue for the Ethereum ecosystem.”

Consensys contended that its lawsuit exposed the SEC’s overly aggressive investigation into Ethereum, reflecting widespread concern among policymakers and the public regarding the regulator’s scrutiny of blockchain software development.

An SEC spokesperson declined to comment on the dismissal of the case. When Consensys filed the lawsuit in April, it sought a court ruling declaring that Ethereum’s ether (ETH) is not a security and argued that any investigation into the company based on this premise would infringe on its rights.

Additionally, Consensys asserted that MetaMask does not qualify as a broker under federal law and that its staking service complies with securities regulations.

Following the conclusion of the ETH investigation, the SEC brought charges against Consensys in June, claiming that the MetaMask service was operating as an unregistered securities broker.

Although the SEC has not publicly commented on the status of ETH, last week, the regulator reached a settlement with eToro, allowing the trading platform to continue listing ETH in the U.S.