Regulation
SEC Targets Consensus on Unregistered Securities
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Ethereum software provider Consensys. The lawsuit claims that it is MetaMask service operated as an unregistered securities broker.
The lawsuit, filed in the U.S. Court for the Eastern District of New York, also seeks Ethereum Staking Lido services e Rocket Pool.
SEC Targets Consensys in Latest Crypto Crackdown
According to court documents, MetaMask has facilitated more than 36 million crypto transactions over the past four years. At least 5 million of these transactions involved Polygon (MATIC), Mana (MAN), chili (CHZ), the sandbox (SAND), AND moon (MOON). The SEC classifies these tokens as unregistered securities.
“Since at least January 2023, Consensys has offered and sold tens of thousands of unregistered securities on behalf of liquid staking program providers Lido and Rocket Pool,” the SEC said. declared.
In response to the lawsuit, Consensys said it expected the SEC to require MetaMask to register as a securities dealer.
“The SEC has pursued an anti-crypto agenda driven by ad hoc enforcement actions. This is just the latest example of its regulatory overreach: a transparent attempt to redefine long-standing legal standards and expand the SEC’s jurisdiction through lawsuits,” Consensys noted.
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The SEC lawsuit also examines MetaMask’s staking feature, which allows users to deposit assets to secure the Ethereum blockchain in exchange for interest. This feature is supported by third-party staking services. Lido and Rocket Pool, issuing stETH and rET in exchange for staked assets. The SEC claims that these integrations amount to “investment contracts” and that liquid staking tokens are unregistered securities.
“Since January 2023, Consensys has engaged in the unregistered offering and sale of securities in the form of cryptocurrency staking programs and acted as an unregistered broker, through its MetaMask Staking service. Through its unregistered broker conduct, Consensys has collected over $250 million in commissions,” the SEC further stated.
Consensys, led by the co-founder of Ethereum Joe Lubin has previously been investigated by the SEC. Although Consensys announced that those investigations were over, the latest lawsuit has renewed its legal challenges.
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Consensys has actively defended its operations and regulatory position. This lawsuit follows Consensys’ previous lawsuit against the SECseeking relief from the possibility of MetaMask being classified as a broker. The outcome of that case was in favor of the SEC. Consensys believes that this new lawsuit simply adds to the SEC’s “anti-crypto” agenda.
“We are confident in our position that the SEC has not been granted the authority to regulate software interfaces like MetaMask. We will continue to vigorously pursue our case in Texas to rule on these matters because it is important not only to our company but also for the future success of Web3″, Consensys concluded.
These issues highlight the problems resulting from unclear and hostile regulations towards cryptocurrencies. Consensys is one of many companies taking a stand to find a happy medium. The outcome of these legal battles could have a significant impact on cryptocurrency regulation and the future development of Web3.
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