SEC Targets MetaMask Developers, Here's Why!

SEC Sues Consensys over MetaMask Swap and staking features (Photo; Doc. Moneytimes)

JAKARTA - The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Ethereum infrastructure provider Consensys on charges of offering unregistered securities through staking and decentralized trading services in the MetaMask wallet application.

The lawsuit comes two months after the SEC issued Wells notifications to Consensys, revealing the agency's intention to sue over a popular Ethereum wallet claimed its website was "trusted by more than 100 million users worldwide."

Reporting from Crypto Potato, in a press release on Wednesday, the SEC stated that Consensys has been involved in unregistered securities offers and sales through the Staking MetaMask service. This includes tens of thousands of unregistered securities on behalf of Lido and Rocketpool, a liquid staking provider integrated with Lido.

Meanwhile, MetaMask Staking and MetaMask Swaps services allegedly made the company unregistered brokers' by providing investment information about crypto assets, facilitating trade, and raising hundreds of millions of dollars in costs as unregistered brokers.

"Consensys has clearly placed himself in the US securities market but ignored the protection provided by federal securities laws," said Gurbir S. Grewal, Director of SEC Enforcement Division, in an accompanying statement.

Consensys Resistance

Earlier this week, the SEC closed its investigation into Consensys regarding Ethereum 2.0 and its potential status as an unregistered securities. Experts believe that the agency's latest approval of the Ethereum spot ETF is de facto recognition that Ethereum is legally a commodity outside the SEC jurisdiction.

However, Consensys' struggle is not over yet. Prior to Friday's announcement, June 28, Consensys had sued the SEC pre-emptively to ask for a court declaration that its staking and swap services did not violate securities laws.

In a post on Twitter on Friday, Consensys called the SEC's lawsuit against him the latest example of overreach regulations.

"We will continue to persistently fight for our case in Texas to get a decision on this issue because it matters not only to our company but also to the success of the web3 future," the company said.