- The crypto sector still has a long way to go before regulatory hurdles end.
- SEC claims that the firm has been using its MetaMask platform to offer and sell securities.
MetaMask platform’s developer, ConsenSys Software Inc., has been unexpectedly hit with a lawsuit by the United States Securities and Exchange Commission (SEC). Just days after ConsenSys CEO Joseph Lubin voiced hope for better ties between authorities and the cryptocurrency sector, the company is facing legal action.
Lubin expressed optimism because of the recent good sign—the SEC’s decision to close its inquiry into Ethereum. The recent action against ConsenSys, however, shows that the crypto sector still has a long way to go before regulatory hurdles end.
Selling Securities Without Registration
U.S SEC officials have taken legal action against ConsenSys Software Inc., claiming that the firm has been using its MetaMask platform to offer and sell securities without proper registration. Key components of ConsenSys’ business, MetaMask Staking and MetaMask Swaps, are the subject of the SEC’s lawsuit.
Through its MetaMask Swaps service, which enables users to trade different tokens and cryptocurrencies, ConsenSys has allegedly operated as an unregistered broker of crypto asset securities since October 2020, according to the SEC. Furthermore, the lawsuit claims that ConsenSys has been providing its MetaMask Staking service, which involves staking crypto assets, as unregistered securities since January 2023.
Moreover, the regulatory authority claims that ConsenSys has violated federal securities regulations by providing these services to investors without first registering them. Through its unlicensed broker operations, ConsenSys allegedly earned more than $250 million in fees, according to the SEC. In the ever-changing realm of digital assets, the SEC is attempting to regulate the cryptocurrency sector and enforce securities rules via this case.
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