Laura Brookover, head of litigation at Consensys, said the company will continue to sue the SEC as the “battle” for regulatory clarity is “far from over.”
In a June 21 interview with CNBC, Brookover said that despite the conclusion of the Ethereum 2.0 investigation, the SEC has not provided any regulatory clarity regarding Ethereum’s classification. He added that the company will continue to strive for greater clarity on digital assets.
Brookover also said two SEC investigations are still ongoing to determine whether Consensys violated securities laws through the swapping and staking features of its MetaMask wallet.
The regulator had previously sent Wells a notice to Consensys on both matters, indicating that it intends to take enforcement action on both matters.
Brookover said:
“Our current plans are…to continue fighting so we can get the relief we requested with the lawsuit.”
Consensys aims to obtain a declaration that MetaMask’s two features do not violate securities law, as previously stated in the April lawsuit.
The conclusion of the first case is not sufficient
The SEC concluded an investigation via a June 18 letter. Brookover said the first investigation “really focused on the Ethereum protocol itself” and whether ETH is a security asset, including Ethereum 2.0, the merger, and the network’s transition to staking.
Brookover said the SEC’s letter about the end of the investigation only confirms that the agency will refrain from charging the company and does not provide the clarity Consensys sought through its legal case.
Brookover said:
“It prevented us from drawing any conclusions from it, like… that [the SEC] discovered that Ether was a commodity and not a security.”
He said the end of the investigation “is not sufficient” in providing transparency into why the agency ended the investigation. It is also unclear how the development is relevant to many other investigations and enforcement actions the SEC has underway.
Brookover speculated that “increasing pressure” from Congress and other industry members led the SEC to end its investigation, but said the SEC did not provide an explanation.
He also suggested that the SEC’s approval of Ethereum ETF spot rule changes on May 23 is “part and parcel of everything that’s happening within the agency” regarding its stance on ETH.
Brookover condemned the SEC’s overall position, stating:
“Regulation through enforcement is completely backwards. There should be clarity so that companies… can know for sure whether what they are doing is acceptable under the law…”
He said companies currently have to wait for oral arguments during enforcement actions to learn the SEC’s position. He called the approach “no way to regulate” the cryptocurrency industry and urged the SEC to take a more collaborative approach with the industry.
