SEC Drops Lawsuit Against Consensys – Is Crypto Regulation Finally Easing?

The SEC drops its lawsuit against Consensys, signaling a shift in crypto regulation and raising optimism for Ethereum's future.

Fridah Kangai
February 28, 2025
10:30 am

Fridah Kangai

Fridah Kangai is a dedicated crypto journalist with a sharp eye for market trends, blockchain innovation, and digital asset movements. She specializes in breaking down complex topics into clear, engaging stories for both seasoned investors and curious newcomers. With a passion for decentralization and a pulse on the ever-evolving crypto space, Fridah delivers timely, accurate, and insightful coverage. Her work bridges the gap between technology and everyday understanding in the world of cryptocurrency.

The SEC’s decision to drop its lawsuit against Consensys marks a significant shift in crypto regulation under new leadership.
Following the dismissal of cases against Coinbase and Uniswap, the SEC continues to scale back its enforcement in the crypto space.
With Ethereum’s future promising, industry experts speculate on the following regulatory moves under the SEC’s evolving approach.

The U.S. Securities and Exchange Commission (SEC) has agreed in principle to drop its lawsuit against Ethereum software developer Consensys. The agency had initially accused the firm of violating securities laws by allegedly operating the Metamask wallet as an unregistered broker.

Consensys CEO Joseph Lubin confirmed the development, saying that the SEC would file a stipulation with the court soon to end the case. Lubin spoke positively about the new leadership of the SEC, which, in his view, means a shift towards encouraging innovation.

I'm pleased to announce that Consensys and the SEC have agreed in principle that the securities enforcement case concerning MetaMask should be dismissed. Subject to the approval of the Commission, the SEC will file a stipulation with the court that effectively closes the case.…
— Joseph Lubin (@ethereumJoseph) February 27, 2025

Regulatory Retreat Following Leadership Change

The SEC’s decision to withdraw its case against Consensys is part of a broader shift in regulatory enforcement under Acting Chair Mark Uyeda. The agency also dismissed its lawsuit against Coinbase, the largest U.S.-based cryptocurrency exchange.

Notably, the SEC has recently withdrawn its enforcement actions against Robinhood, a zero-fee trading app, and Uniswap Labs, the leading DeFi company. These measures signal a shift of departing from enforcement measures that characterized the leadership of the previous SEC Chair, Gary Gensler.

The departure of Gensler, widely regarded as a strict regulator of the cryptocurrency sector, appears to have prompted a reassessment of the agency’s stance on digital assets. Paul Atkins, a former commissioner, has been nominated to replace Gensler, though his confirmation is still pending.

Implications for Ethereum and Broader Crypto Markets

The recent decision to drop the Consensys lawsuit has been seen as a positive shift within the cryptocurrency community, especially Ethereum. Lubin has expressed that he expects 2025 to be a big year for both Ethereum and Consensys, pointing to the direction toward decentralization.

However, there are still concerns regarding the existing regulation as the SEC has not withdrawn its appeal in the Ripple case. Other observers believe the agency may abandon that appeal, too, following its new habit of reversing enforcement actions.

The crypto industry is closely watching the SEC’s next moves as the leadership shift continues redefining its approach to regulation.

Also Read: Ripple Expands Institutional Crypto Custody in South Korea Through BDACS Partnership