Updated: June 28, 2024 1:12 PM EDT
The U.S. Securities and Exchange Commission has sued Consensys, alleging that the company failed to register as a broker with the MetaMask swap service.
“Consensys also violated the law through its MetaMask staking service,” the SEC said in a complaint filed Friday in the U.S. District Court for the Eastern District of New York.
Consensys engaged in the offering and sale of unregistered securities in the form of a crypto asset staking program and acted as an unregistered broker through its MetaMask staking service, the agency said. Consensys collected over $250 million in fees through its activities as an unregistered broker, it added.
The complaint said Lido and Rocketpool’s staking services were also securities. “Specifically, as detailed below, investors invest ETH in common companies with reasonable expectations of profits from the management efforts of Lido and Rocket Pool, respectively,” it said.
Last month, Consensys sued the SEC over its approach to regulating Ethereum, saying at the time that the SEC had “trained its eyes” on the company’s MetaMask software.
In the complaint, the company also stated that it had received a Wells Notice, which means the agency is formally notified that it intends to take enforcement action against them. However, Consensys announced last week that the SEC’s enforcement division notified the company that it was closing its investigation into Ethereum.
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About the author
Sarah is a reporter for The Block, covering policy, regulation, and legal cases. Previously, Sarah was a reporter covering securities regulation at CQ Legal, where she first began reporting on cryptocurrencies. Sarah has also written for The Bond Buyer and American Banker, among other financial publications. She graduated from the University of Missouri with a degree in print and digital journalism. Sarah lives in Washington, D.C., and is an avid coffee drinker. You can follow her on Twitter @ForTheWynn.