US SEC Sues Consensys, the Parent Company of MetaMask, for Providing Staking and Brokerage Services Around Unregistered Securities Contracts
- 王林Original
- 2024-07-02 07:37:06761browse
This suit was filed on 28 June, stating, “Consensys violated the federal securities laws by failing to register as a broker and failing to register the offer and sale of certain securities, thereby depriving investors of crucial protections that those laws afford.”
The United States Securities and Exchanges Commission (SEC) has filed a lawsuit against ConsenSys, the company behind the popular crypto wallet MetaMask, on Wednesday for allegedly providing staking and brokerage services around unregistered securities contracts.
The SEC filed the lawsuit in the Southern District of New York on June 28, alleging that ConsenSys violated the federal securities laws by failing to register as a broker and failing to register the offer and sale of certain securities, "thereby depriving investors of crucial protections that those laws afford."
The SEC also alleges that ConsenSys has collected hundreds of millions of dollars in fees over the past four years through its alleged illegal MetaMask operations and that it knowingly put investors at risk.
“Since October 2020, ConsenSys has acted as an unregistered broker of crypto asset securities through its MetaMask Swaps service. This service allows users to swap certain crypto assets for others, and ConsenSys collects a fee on each swap,” the SEC said in a statement.
“The SEC further alleges that since January 2023, ConsenSys has engaged in the unregistered offer and sale of securities in the form of crypto asset staking programs, and acted as an unregistered broker, through its MetaMask Staking service. By its conduct as an unregistered broker, ConsenSys has collected over $250 million in fees.”
The SEC alleges that ConsenSys violated the federal securities laws by failing to register as a broker and failing to register the offer and sale of certain securities. The SEC also alleges that ConsenSys knowingly put investors at risk.
The SEC is seeking a permanent injunction, disgorgement of ill-gotten gains plus prejudgment interest, and a civil monetary penalty.
The SEC's definition of securities in this case is related to the staking service ConsenSys offers through MetaMask. The SEC alleges that ConsenSys’ MetaMask Staking service is integrated with two decentralized applications (dApps) that offer liquid staking of Ether (ETH).
“Investors can stake their ETH with Lido or Rocket Pool through MetaMask in exchange for a derivative token that represents their staked ETH and accrues rewards,” the SEC said.
“The SEC alleges that the liquid staking services on Lido and Rocket Pool are unregistered securities offerings because investors make an investment of ETH in a common enterprise with a reasonable expectation of profits from the managerial efforts of Lido and Rocket Pool, respectively.”
ConsenSys received a Wells Notice in April regarding acting as a broker/dealer of illegal securities, and it quickly responded by filing a lawsuit against the SEC. ConsenSys claimed that the SEC is pursuing an anti-crypto agenda with ad hoc enforcement action.
“This is just the latest example of its regulatory overreach — a transparent attempt to redefine well-established legal standards and expand the SEC’s jurisdiction via lawsuit,” ConsenSys said in April.
ConsenSys was expecting the SEC to sue it, and it prepared for the eventuality with a preemptive lawsuit.
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