A federal judge has approved a timeline for the court to consider the merits of the lawsuit filed by software firm Consensys against the US Securities and Exchange Commission (SEC) and its commissioners.
In a July 1 filing in the US District Court for the Northern District of Texas, Judge Reed O’Connor established deadlines requiring SEC and Consensys lawyers to file opening and opposition briefs by September and November, respectively.
Additionally, the judge granted the SEC a 28-day extension to respond to the complaint.
Timeline
According to the timeline, all five SEC commissioners and the regulator must file their answers by July 29, with reply briefs due by Nov. 26.
Consensys senior counsel and director of global regulatory matters Bill Hughes said in a July 2 social media post that he expects a ruling on the case around December. He harkened to a Christmas song, writing:
“It’s beginning to look a lot like Christmas.”
Consensys filed its lawsuit against the SEC in April, alleging the regulator was being “unlawful” by trying to assert control over the “future of crypto” through enforcement actions aimed at regulating Ethereum (ETH) as a security.
In June, Consensys reported that the SEC had ended its investigation into ETH. However, the SEC subsequently filed its own lawsuit, alleging that Consensys had been operating as an unregistered broker.
SEC authority
Legal experts in the crypto sector are closely monitoring the civil case due to its potential implications for the SEC’s regulatory authority. The watchdog is currently engaged in several pending lawsuits against other crypto firms, including Coinbase, Binance, and Ripple Labs.
Commissioner Mark Uyeda, also named in the Consensys lawsuit, described the SEC’s approach to crypto regulation as “problematic” in a separate statement on July 1.
The SEC and Consensys lawsuits were initiated before the US Supreme Court issued two opinions that could influence how the commission handles enforcement cases. One opinion determined that defendants in SEC civil cases involving securities fraud are entitled to a jury trial, while another requires courts to assess whether a federal agency like the SEC has acted within its statutory authority.
The outcome of this case may have significant ramifications for the regulatory landscape of cryptocurrencies and the SEC’s future enforcement strategies.
