SEC Serves Fresh Lawsuit To Metamask Developer Consensys – What’s The Problem This Time?
29 Junho 2024 - 4:30PM
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The US Securities and Exchange Commission (SEC) has instituted a
lawsuit against Metamask developer, Consensys. The Commission
alleges that the crypto firm violated securities laws by acting as
an unregistered securities broker. Related Reading: Chainlink
(LINK) To Hit New Highs? Analysts Predict $25 Target SEC Accuses
Consensys Of Violating Securities Laws Using Metamask According to
the court document, the SEC claims that Consensys has acted “as an
unregistered broker of crypto asset securities through its MetaMask
Swaps service” since October 2020. The Commission also accused the
crypto firm of engaging in the unregistered offer and sale of
securities through crypto staking programs. The SEC stated
that Consensys has brokered over 36 million crypto transactions
since 2020 through its MetaMask Swaps, at least 5 million involving
crypto asset securities. Metamask is known as one of the most
widely used crypto wallets. In addition to storing their crypto
assets on the application, users can buy and sell cryptocurrencies
by swapping one crypto asset for the other. This ‘Swap’
service forms the focal point of the SEC’s enforcement action. The
SEC claims that some of these crypto assets are securities, and by
enabling users to swap these securities, Consensys acted as an
unregistered securities broker, thereby violating securities laws
in the process. The SEC went further to list Polygon (MATIC),
Decentraland (MANA), Chiliz (CHZ), The Sandbox (SAND), and Luna
(LUNA) as the crypto securities that were made available for
trading on Metamask’s swap platform. Additionally, the SEC accused
Consensys of performing a “traditional function of the securities
market” by offering and selling securities for Lido and Rocket
Pool. The Commission claimed that the staking programs offered by
Lido and Rocket Poo are investment contracts and that Consensys was
in the wrong by offering these securities through unregistered
transactions on its ‘MetaMask Staking’ platform. The Genesis
Of The Legal Battle Between SEC And Consensys Interestingly, the
SEC’s lawsuit against Consensys comes just months after the crypto
firm filed a lawsuit against the Commission, accusing the SEC of an
“unlawful seizure of authority.” Consensys sought Judicial relief
against a potential action from the SEC. They also asked the court
to declare that Ethereum wasn’t a security and that the SEC had no
jurisdiction over crypto-related matters. The crypto firm
looked to have won that battle, considering that the SEC dropped
its investigation into Ethereum’s status as a security. However, in
the letters informing Consensys about the Commission’s decision to
drop its investigation into Ethereum, the SEC had warned the crypto
firm that they could bring enforcement actions against them
relating to other issues, which they have now done. Related
Reading: Don’t Sweat The Dip! Ethereum 15% Price Slump Could Spark
Epic Comeback — Analyst Reacting to the SEC’s lawsuit, Consensys
stated that it would “vigorously pursue” the lawsuit it had
initially filed against the SEC. The crypto firm also remarked that
they had fully expected” the SEC to follow through with its threat
of claiming that MetaMask had to be registered as a securities
broker. Featured image from CNBC, chart from TradingView
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