Ethereum
SEC reverses legal case against Consensys, files lawsuit against Ethereum staking service Metamask ⋆ ZyCrypto
The U.S. Securities and Exchange Commission has filed a lawsuit against Ethereum software provider Consensys, alleging that the latter’s Metamask swap service was an unregistered broker-dealer that “engaged in the offer and sale of securities.”
According to the June 28 complaint, ConsenSys racked up more than $250 million in fees by brokering crypto asset transactions and offering staking services without the necessary registration, thereby circumventing crucial investor protections mandated by the laws. federal securities regulations.
“Since January 2023, Consensys has engaged in the unregistered offer and sale of securities in the form of crypto asset staking programs, and acted as an unregistered broker-dealer, through its MetaMask Staking service,” the SEC said in its filing.
The regulator also alleged that by allowing investments in Lido and Rocket Pool’s staking programs, Consensys acted as an intermediary in unregistered transactions, depriving investors of necessary protections.
“Consensys offered and sold tens of thousands of securities for two issuers: Lido and Rocket Pool. Through this conduct, Consensys acts as an underwriter of these securities and participates in key aspects of their distribution,” the SEC said.
On top of that, the regulator claimed that Consensys itself was “negotiating transactions in crypto asset securities,” designating MATIC, MANA, CHZ, SAND, and LUNA as unlicensed securities. These tokens have all been labeled as securities in previous lawsuits.
“Since their first offering or sale, each of these Crypto Asset Securities has been offered and sold, and has continued to be offered and sold on the Consensys Platform as an investment contract and therefore security,” the filing states.
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In particular, Consensys filed a preemptive action against the SEC in late April after receiving notice from Wells that the agency intended to take enforcement action over MetaMask’s staking programs. Consensys’ lawsuit, filed in Texas, also argued that the SEC had secretly viewed Ethereum as a security for over a year and was building a broader case against the second-largest cryptocurrency.
Then, earlier this month, Consensys revealed that the SEC had ended investigations into Ethereum 2.0Crypto fans celebrated the news as a major capitulation by the regulator suggesting a change in tide in the United States regarding crypto oversight.
Although today’s lawsuit filed by the SEC was expected, it nonetheless suggests that the SEC has refused to back down when it comes to launching attacks against prominent US crypto companies.
A Consensys spokesperson said in a statement Friday that the company “fully expects the SEC to follow through on its threat to require our MetaMask software interface to register as a securities broker.”
“The SEC has pursued an anti-cryptocurrency policy, driven by ad hoc enforcement actions,” the representative said. “This is just the latest example of its regulatory overreach: a transparent attempt to redefine well-established legal standards and expand the SEC’s jurisdiction through lawsuits. »
Consensys claims the SEC “has not been given the authority” to regulate software interfaces like MetaMask. “We will continue to vigorously litigate our arguments in Texas to obtain a ruling on these issues,” the company said.
The price of Ether fell by 1.4% in the last 24 hours, according to data from CoinGecko.