The U.S. Securities and Alternate Fee (SEC) is suing Consensys, claiming that the blockchain tech agency’s MetaMask pockets acted as an unregistered securities dealer.
In response to latest court documents, the SEC says Consensys violated federal legal guidelines by failing to register with the regulatory company as a securities dealer.
“Since October 2020, Consensys has acted as an unregistered dealer of crypto asset securities via its MetaMask Swaps service.
Since January 2023, Consensys has engaged within the unregistered supply and sale of securities within the type of crypto asset staking applications, and acted as an unregistered dealer, via its MetaMask Staking service. By its conduct as an unregistered dealer, Consensys has collected over $250 million in charges.”
Moreover, the SEC alleges that Consensys additionally engaged within the gross sales of securities for crypto staking protocols Lido and Rocket Pool.
“Along with working as an unregistered dealer with respect to MetaMask Swaps, Consensys performs one other conventional perform of the securities market: providing and promoting securities.
Particularly, Consensys has supplied and bought tens of 1000’s of securities for 2 issuers: Lido and Rocket Pool. By this conduct, Consensys acts as an underwriter of these securities and participates in the important thing factors of their distribution.”
Consensys responded to the lawsuit, saying that the SEC is partaking in regulatory overreach to increase its energy.
“The SEC has been pursuing an anti-crypto agenda led by advert hoc enforcement motion. That is simply the most recent instance of its regulatory overreach – a clear try and redefine well-established authorized requirements and increase the SEC’s jurisdiction through lawsuit.
We’re assured in our place that the SEC has not been granted authority to control software program interfaces like MetaMask.”
Earlier this 12 months, the SEC despatched Consensys a Wells discover after saying that it was investigating whether or not the sensible contract platform Ethereum (ETH) was a safety beneath its jurisdiction. Nonetheless, Consensys stated it obtained a discover that the regulatory company ended its investigation into the agency earlier this month with out taking any enforcement motion.
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