In a surprise move, the U.S. Securities and Exchange Commission (SEC) has sued cryptocurrency firm Consensys for failing to register as a broker for its MetaMask swaps service and not registering the offer and sale of securities through its crypto staking programs. The SEC alleges that Consensys collected over $250 million in fees as an unregistered broker through these services.
Consensys operates the popular MetaMask self-custodial crypto wallet, allowing users to store, buy, send, and swap tokens. However, the SEC claims that Consensys violated broker registration requirements and failed to register the offer and sale of securities through its crypto staking programs. The lawsuit was filed in U.S. District Court in Brooklyn, New York, by the SEC.
Despite receiving notice that the SEC had closed its investigation into the company, Consensys plans to continue pursuing its lawsuit to challenge the SEC’s authority to regulate software interfaces built on the ethereum blockchain. In April, Consensys sued the SEC after receiving a formal notice of a planned enforcement action against the company. The lawsuit claimed that the SEC was attempting to regulate ether, the world’s second-largest cryptocurrency, unlawfully through these actions.
Consensys did not immediately respond to requests for comment on this latest development in their ongoing legal battle with the SEC. As this case unfolds, it will be interesting to see how both parties navigate this complex issue surrounding cryptocurrency regulation in the United States.