- HODL Law sought to assist clients harmed in the crypto space and sued SEC over Ethereum’s security status.
- The court granted SEC’s motion to dismiss HODL LAW’s suit due to lack of standing.
- The law firm believes SEC’s unclear position indicates potential future action against Ethereum.
On August 1, HODL LAW tweeted that they will meticulously carry out their duty as expert legal counsel and assist all clients “that have been hurt and taken advantage of in the crypto space.” On July 28, HODL LAW, PLLC sued the U.S. Securities and Exchange Commission (SEC) in a United States District Court, seeking declaratory relief on whether Ethereum (ETH) is considered a security.
Yesterday, the blockchain legal firm clarified that the court granted the SEC’s motion to dismiss based on procedural grounds, ruling that HODL LAW lacked standing to sue. The court also mentioned that the SEC had not taken any “final agency action” on Ethereum, leading to ongoing confusion in the crypto space.
HODL LAW expressed disappointment with the ruling, as they believe there is no imminent threat from the SEC due to the agency’s unclear position on Ethereum and its enforcement-by-litigation approach. Moreover, the court highlighted that the SEC had not investigated HODL LAW or threatened to do so, making the harm more remote.
HODL LAW argued that the SEC’s recent refusal to comment on Ethereum, along with their stance in the case, indicates they view Ethereum as a security and are waiting for the right time to take action. The court further noted,
Although the SEC’s failure to issue firm guidance on whether the Ethereum Network and Ether DCU’s are securities creates insecurity among the users, this uncertainty demonstrates why the controversy is uncertain at best.
While the court ruling has left Ethereum’s legal status uncertain, lawyer and crypto expert Bill Morgan said that only Ripple’s XRP currently enjoys legal clarity. Stuart Alderoty, Ripple’s CLO, recently clarified that the Terra case ruling has no impact on XRP’s status as a security, citing the comprehensive factual record developed over two years in the Ripple case.
Meanwhile, HODL LAW is exploring appellate options and constitutional grounds that were not addressed by the court, despite the setback.
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