SEC Targets Consensys for Alleged Unregistered Broker Activities via MetaMask
Details of the SEC Complaint
The SEC’s complaint alleges that Consensys has amassed over $250 million in fees by facilitating crypto asset transactions and offering staking services without the requisite regulatory approvals. This lack of registration, the SEC argues, has deprived investors of essential protections that are standard in regulated financial activities.
The complaint details, “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.”
Furthermore, the SEC accuses Consensys of acting as an intermediary in unregistered transactions by facilitating investments in staking programs offered by Lido and Rocket Pool, thereby acting as an underwriter for these securities.
Staking Programs Under Scrutiny
The SEC’s filing emphasizes that the staking programs provided by Lido and Rocket Pool should be classified as investment contracts. Investors in these programs, the SEC argues, are pooling their Ether (ETH) with the expectation of earning profits predominantly from the efforts of Lido and Rocket Pool’s management.
Understanding Staking
At the time of reporting, Consensys had not responded to requests for comment regarding the SEC’s allegations.
This legal challenge by the SEC could have significant implications for the broader crypto market, particularly for services that offer staking. As the situation develops, further updates will be provided, shedding more light on the impact of this lawsuit on Consensys and the cryptocurrency sector at large.
Related: Ether ETF approvals show staking may still be a security in SEC’s eyes
This is a developing story, and more details are expected to emerge as the case progresses.
