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the US Securities and Exchange Commission (SEC) File a lawsuit against Metamask developer, ConsensysThe commission alleges that the cryptocurrency company violated securities laws by acting as an unregistered securities broker.
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SEC Charges Consensys With Violating Securities Laws Using Metamask
According to the Court documentThe SEC alleges that Consensys acted “as a corporation Unregistered broker “Cryptocurrency Securities Through MetaMask Swaps Service” since October 2020. The Commission also accused the crypto company of engaging in the unregistered offer and sale of securities through cryptocurrency custodial programs.
The SEC said Consensys has brokered more than 36 million cryptocurrency transactions since 2020 through MetaMask Swaps, at least 5 million of which involved crypto-asset securities. 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 forms the focal point of the SEC’s enforcement actions. The SEC claims that some of these crypto assets are securities, and by enabling users to swap these securities, Consensus He acted as an unregistered securities broker, thus violating securities laws in the process.
The SEC went further to list polygonal (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 Pool. The Commission claimed that the staking programs offered by Lido and Rocket Poo were investment contracts and that Consensys was in error by offering these securities through unrecorded transactions on its “MetaMask Scking” platform.
The Legal Battle Between the SEC and Consensys
Interestingly, the SEC’s lawsuit against Consensys comes just months after the cryptocurrency company… He filed a lawsuit Against the Commission, accusing the SEC of an “illegal power grab.” Consensys sought injunctive relief against potential SEC action. It also asked the court to declare that Ethereum was not a security And that the SEC has no jurisdiction over matters related to cryptocurrencies.
It seems that the cryptocurrency company has won this battle, considering that The Securities and Exchange Commission dropped its investigation In positioning 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 take enforcement action against it in connection with other cases, which it has now done.
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In response to the SEC lawsuit, Consensys advertiser It said it would “vigorously” pursue the lawsuit it initially filed against the SEC. The cryptocurrency company also noted that it fully expected the SEC to follow through on its threat to require MetaMask to register as a securities broker.
Featured image from CNBC, chart from TradingView
