SEC Takes Legal Action Against ConsenSys

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against ConsenSys, the developer of the MetaMask wallet.

The lawsuit was filed in the Eastern District of New York. The agency alleges that the firm violated the law through its MetaMask Staking service.

The regulator claims that:

• since October 2020, ConsenSys has been “operating as an unregistered securities broker”;
• since January 2023, the company has been involved in offering and selling unregistered securities through MetaMask Staking, specifically mentioning the liquid staking services Lido and Rocket Pool.

“As an unregistered broker, ConsenSys has collected over $250 million in fees,” the SEC asserts.

On April 26, the company filed a lawsuit against the Commission and five unnamed employees over “oversight of ETH.” It urged the court to officially establish a definition under which the asset would not be considered a security.

In June, ConsenSys announced that the SEC’s enforcement division had closed its investigation into Ethereum 2.0. The agency took this step after the organization sent a letter requesting clarification on the asset class when approving spot ETH-ETFs.

Later, the company stated its intention to seek greater regulatory clarity regarding cryptocurrencies and would therefore continue its legal battle with the SEC.

In April 2024, the largest decentralized exchange, Uniswap, received a warning from the agency about a potential lawsuit.