MetaMask in Hot Water: SEC Alleges Unregistered Broker Activity, $250M in Fees
- The SEC charges Consensys for allegedly violating the securities laws.
- Reportedly, Consensys failed to register as a broker through its MetaMask swaps service.
- MetaLawMan addresses the lawsuit as a mirror image of the Consensys’ complaint against the SEC.
The Securities and Exchange Commission has filed a lawsuit against ConsenSys, the software company behind the popular MetaMask wallet, alleging the firm violated securities laws by operating as an unregistered broker and offering unregistered securities through its staking programs, MetaMask swaps service.
MetaLawMan, a data and legal expert, took to X (formerly Twitter) to comment on the SEC’s action. He characterized the SEC’s complaint as a “mirror image of the case ConsenSys filed against the SEC in Texas.”
In its lawsuit against the SEC , ConsenSys emphasized the importance of Ethereum and criticized the agency’s regulatory overreach. The crypto firm argued against the SEC’s attempt to classify Ether as a security, highlighting how the regulators’ “reckless approach” is disrupting the crypto ecosystem.
In a move that some see as retaliation for ConsenSys’s earlier lawsuit against the agency, the SEC filed the latest complaint in the U.S. District Court in Brooklyn, New York, accusing ConsenSys of offering unregistered securities through its crypto staking programs, generating over $250 million in fees through this activity.
Earlier this month, ConsenSys declared a major win with the SEC’s decision to end its investigation into Ethereum. The platform wrote , “The Enforcement Division of the SEC responded by notifying us that it is closing its investigation into Ethereum 2.0 and will not pursue an enforcement action against ConsenSys.” Despite this earlier victory for ConsenSys, tensions between the two remained high as evidenced by the latest SEC lawsuit.
ConsenSys asserted that the platform’s fight against the SEC’s regulatory overreach will continue despite this development. While the end of the Ethereum investigation offered a brief respite, the SEC’s lawsuit against ConsenSys underscores the ongoing regulatory challenges facing the crypto industry. Industry participants are taking a close watch as the outcome could have far-reaching implications for the future of crypto regulation in the United States.
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