In a shocking move, the U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against cryptocurrency firm Consensys for failing to register as a broker for its MetaMask swaps service and for 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, which operates the popular MetaMask self-custodial crypto wallet, allows users to store, buy, send, and swap tokens. Despite this, the SEC claims that Consensys violated broker registration requirements and failed to register the offer and sale of securities through its crypto staking programs.
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. However, following an investigation into their case by the SEC, Consensys announced on social media that they had closed their investigation into the company but will continue their lawsuit to assert that the SEC does not have legal authority to regulate software interfaces built on the ethereum blockchain.
The lawsuit was filed in U.S. District Court in Brooklyn, New York by the SEC. If found guilty of violating broker registration requirements and failing to register securities transactions through its crypto staking programs, Consensys could face significant financial penalties and damage to its reputation in the cryptocurrency industry.
