the US Securities and Exchange Commission (SEC) He has filed a lawsuit against Metamask Developer, ConsensysThe commission alleges that the cryptocurrency company violated securities laws by operating as an unregistered securities broker.
Related reading
SEC Charges Consensys With Violating Securities Laws Using Metamask
According to the Court documentThe SEC alleges that Consensys acted “as a corporation Unregistered broker of cryptocurrency securities through its MetaMask Swaps service” since October 2020. The Commission also accused the cryptocurrency company of engaging in the unregistered offering and sale of securities through cryptocurrency staking programs.
Consensys has brokered more than 36 million cryptocurrency transactions since 2020 through MetaMask Swaps, including at least 5 million involving crypto asset securities, the SEC said. Meta mask It is known as one of the most widely used crypto wallets. In addition to storing their crypto assets on the app, users can buy and sell cryptocurrencies by swapping one crypto asset for another.
This “swap” service is the focal point of the SEC’s enforcement actions. The SEC alleges that some of these crypto assets are securities, and by enabling users to swap these securities, Consensus He operated as an unregistered securities broker, violating securities laws in the process.
The SEC went further with the list. Polygon (MATIC)Decentraland (MANA), Chiliz (CHZ), The Sandbox (SAND), and Luna (LUNA) are the cryptocurrencies that have been made available for trading on Metamask’s exchange platform.
Additionally, the SEC charged Consensys with performing a “traditional stock market function” by offering and selling securities for Lido and Rocket PoolThe Commission alleged that the staking programs offered by Lido and Rocket Poo are investment contracts and that Consensys was wrong to offer these securities through unregistered transactions on its MetaMask Scking platform.
The Legal Battle Between the SEC and Consensys Begins
Interestingly, the SEC’s lawsuit against Consensys comes just months after the cryptocurrency company He filed a lawsuit v. the Commission, accusing the SEC of an “unlawful seizure of power.” Consensys has sought injunctive relief against any potential SEC action. They also asked the court to announce this Ethereum was not a security And the SEC has no jurisdiction over matters relating to cryptocurrencies.
It seems that the crypto company has won this battle, considering that The SEC dropped its investigation. In the case of Ethereum as a security. However, in letters Report to Consensys The Committee’s decision To drop its investigation into Ethereum, the SEC warned the cryptocurrency company that it could bring enforcement actions against it in connection with other cases, which it has now done.
Related Reading
In response to the SEC’s lawsuit, Consensys said advertiser It will “aggressively” pursue the lawsuit it initially filed against the Securities and Exchange Commission. The cryptocurrency company also indicated that it fully expected the SEC to follow through on its threat to require MetaMask to be registered as a securities broker.
Featured image from CNBC, chart from TradingView