Highlights
- SEC alleges that since 2020, MetaMask has been conducting business as an unregistered broker
- Consensys has allegedly made more than $250 million in fees by providing staking services and brokering transactions involving cryptocurrency assets without properly registering
- Consensys had filed a lawsuit against the SEC in April in response to the agency's Wells notice
The United States Securities and Exchange Commission (SEC) has sued Ethereum software provider Consensys. The regulator alleges that since 2020, MetaMask has been conducting business as an unregistered broker and offering and selling securities through MetaMask Swaps without registering as a broker.
Lido and Rocket Pool, two Ethereum staking services, are also named in the lawsuit, which was submitted to the US courthouse in the Eastern District of New York.
The allegations
The lawsuit alleges that Consensys has allegedly made more than $250 million in fees by providing staking services and brokering transactions involving cryptocurrency assets without properly registering, depriving investors of vital protections. For these purported breaches of federal securities laws, the SEC is suing Consensys for equitable relief, civil penalties, and a permanent injunction.
According to the SEC’s statement on the lawsuit, “since at least January 2023, Consensys has offered and sold tens of thousands of unregistered securities on behalf of liquid staking program providers Lido and Rocket Pool, who create and issue liquid staking tokens (called stETH and rETH) in exchange for staked assets. While staked tokens are generally locked up and cannot be traded or used while they are staked, liquid staking tokens, as the name implies, can be bought and sold freely. Investors in these staking programs provided funds to Lido and Rocket Pool in exchange for the liquid tokens.”
The statement further quoted Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, as saying, “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. As this enforcement action shows, we continue to hold noncompliant actors in this space accountable, as we do across the securities market.”
Recall that Consensys filed a lawsuit against the SEC in April in response to the agency's Wells notice, contesting any efforts to categorize Ether and associated staking services as securities.
It declared that it "fully expected" the regulator to carry out its inquiry, stating that: “The SEC has been pursuing an anti-crypto agenda led by 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.”
Active addresses in Bitcoin network drop to lowest level since 2010
Meanwhile, TheRadar earlier reported that the active address ratio of the Bitcoin network has significantly decreased, according to data from IntoTheBlock. The ratio now stands at 1.22%, the lowest since November 2010.
The number of weekly active addresses as of May 27 was 614,770, which is the lowest amount since December 2018.
