Ethereum
SEC Sues Ethereum Company Consensys, Expanding Crackdown Industry-Wide
Joseph Lubin, co-founder of Ethereum and CEO of blockchain company ConsenSys.
Riccardo Savi | Getty Images for Concordia Summit
Crypto firm Consensys has been added to the SEC’s target list, as the regulator continues its industry-wide crackdown.
The Securities and Exchange Commission sued Consensys in federal court in Brooklyn, New York, on Friday over allegations that the company “engaged in the offer and sale of securities” and “acted as an unregistered broker-dealer” through its digital asset wallet called MetaMask.
“Consensys violated federal securities laws by failing to register as a broker-dealer and failing to register the offer and sale of certain securities,” the court file alleged.
In April, blockchain software provider Consensys attempted to preempt the SEC’s action by filing its own lawsuit in Texas, alleging the regulator had exceeded its powers. The 10-year-old company said its complaint followed three subpoenas issued last year, as well as an SEC notice in the Wells case that claimed Consensys was violating laws federal securities regulations.
So far this year, the SEC has sent Wells notices, filed lawsuits, or reached settlements with a host of crypto companies focused on Ethereum and decentralized finance, including ShapeShift, TradeStation, and Uniswap. The agency is also would have investigating the Ethereum Foundation.
Less than two weeks ago, Consensys declared victory in its fight against the SEC.
“The SEC’s Enforcement Division responded by informing us that it is closing its investigation into Ethereum 2.0 and will not pursue enforcement action against Consensys,” the company wrote in a statement. June 18.
A Consensys spokesperson said in an emailed statement Friday that the action was part of an “anti-crypto agenda” by the SEC.
“This is just the latest example of its regulatory overreach – a transparent attempt to redefine well-established legal norms and expand the SEC’s jurisdiction through litigation,” the company said. “We stand by our position that the SEC was not given the authority to regulate software interfaces like MetaMask.”
The spokesperson added: “We will continue to make our case in Texas as well as defend this new case in New York. »