Consensys, the firm that created MetaMask, filed a complaint against the Securities and Exchange Commission.
The complaint contends that the SEC exceeded its regulatory authority.
The SEC, under Chair Gary Gensler, is reportedly aiming to seize power, the company claimed.
“We urge the SEC to recognize the advanced safeguards inherent in Ethereum’s design, which not only meet but exceed the exemplary security and resilience safeguards underlying Bitcoin-based ETPs that have previously been approved by the SEC,” the company said in a statement.
Lecture clarifying that ETH was not a security under the regulator’s standards.
“Recognizing Ethereum’s lack of any centralized managing authority, the SEC’s director of corporation finance stated that ‘current offers and sales of Ether are not securities transactions,'” according to the complaint.
Consensys was served with a Wells Notice earlier this month, which indicated that the government may pursue action against the company at a later date.
“On April 10, 2024, the SEC staff sent Consensys a ‘Wells Notice’ stating its intent to imminently recommend that the Commission bring an enforcement action against Consensys for violating the federal securities laws through its MetaMask Swaps and MetaMask Staking products,” according to the complaint.
The SEC is currently pursuing action against several other cryptocurrency companies, including Binance, Terraform, Ripple, and Coinbase, among others.
Ripple Labs opposed the Securities and Exchange Commission’s request for the court to impose roughly $2 billion in fines.
In the brief, Ripple said that the SEC did not allege “fraud, deceit,” or manipulation and that the lawsuit failed to “show that Ripple recklessly disregarded the law.”
Ripple urged that the judge decide on a penalty of “no more than $10 million.”
Ripple contended that, although any infringement of the Securities Act is a “serious matter,” the company’s infraction did not deserve such a harsh penalty.
“Ripple’s institutional sales are far less egregious,” the petition stated, compared to other crimes like commingling funds or fraud.
The lawsuit also discloses that the SEC has issued several subpoenas to Consensys, including one issued “just last month.”
While parts of the filing are redacted, it reveals the company was also served with three subpoenas in 2023 seeking information on the “role of Consensys, including its software developers, in a host of Ethereum Improvement Proposals related to the Ethereum Merge, the transition from a proof-of-work to a proof-of-stake validation mechanism.”
The submission is the latest in a series of events in which the SEC may investigate ether. Earlier this year, Prometheum revealed plans to launch a custody service with ether as its first asset, triggering the possible conflict.
In March, Consensys wrote to the regulatory agency, requesting it to authorize spot ether ETFs.