The U.S. Securities and Exchange Commission has filed a lawsuit against cryptocurrency firm Consensys for failing to register as a broker for its MetaMask swaps service, as well as for not registering the offer and sale of certain securities through its crypto staking programs. The SEC alleges that Consensys collected over $250 million in fees through its unregistered broker activities. Consensys is known for operating the popular MetaMask self-custodial crypto wallet, which allows users to store, buy, send, and swap tokens.
Despite receiving notice from the SEC about a possible enforcement action against the company in April, Consensys filed a lawsuit against the SEC, claiming that the agency was unlawfully trying to regulate ether, the world’s second largest cryptocurrency, through enforcement actions. Although Consensys announced on June 19 that the SEC had closed its investigation into the company, it plans to continue its lawsuit in order to seek a court ruling stating that the SEC does not have the legal authority to regulate software interfaces built on the ethereum blockchain. Consensys has yet to respond to the SEC’s lawsuit filed in U.S. District Court in Brooklyn, New York.
This legal battle between Consensys and the SEC highlights the ongoing regulatory challenges facing the cryptocurrency industry. The lawsuit raises questions about the extent of the SEC’s authority in regulating digital assets and blockchain technology. As the crypto industry continues to evolve, the outcome of this case could have significant implications for the future of cryptocurrency regulation in the United States.
