Quick take:
- The SEC claims ConsenSys wallet offering MetaMask is an unregistered broker that “engaged in the offer and sale of securities.”
- The wallet is also accused of offering an unregistered securities program through its staking service.
- MetaMask is alleged to have supported staking services for Lido (LDO) and Rocket Pool (RPL) as investment contracts.
Ethereum software provider ConsenSys has become the latest company to be sued by the US Securities and Exchange Commission (SEC) amid allegations related to breaching securities laws.
According to the lawsuit filed Friday, the SEC claims ConsenSys’ crypto wallet offering, MetaMask is an unregistered broker that “engaged in the offer and sale of securities.” The U.S. securities regulator also claims that MetaMask offered an unregistered securities program through its staking service.
According to the lawsuit, MetaMask supported liquid staking services for Lido (LDO) and Rocket Pool (RPL) as investment contracts, implying they are also unregistered securities.
The SEC said in the press release that ConsenSys helped distribute the staking programs and operated as an unregistered broker for the LDO and RPL tokens.
Commenting on the filing, Gurbir S. Grewal, Director of the SEC’s Division of Enforcement said in a statement: “By allegedly collecting hundreds of millions of dollars in fees as an unregistered broker and engaging in the unregistered offer and sale of tens of thousands of securities, Consensys inserted itself squarely into the U.S. securities markets while depriving investors of the protections afforded by the federal securities laws.”
The SEC also alleges that ConsenSys has brokered transactions in crypto asset securities since 2020, including — “soliciting investors to trade crypto asset securities, providing pricing and other investment information regarding crypto asset securities, purporting to provide investors with the “best” quote, accepting and routing customer orders, facilitating order execution, handling customer assets, and receiving transaction-based compensation.”
The lawsuit has been filed in the federal district court in the Eastern District of New York and is charging Consensys with violating the registration provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934 seeking injunctive relief and penalties.
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