Major blockchain technology company, ConsenSys, is in hot water with the U.S. Securities and Exchange Commission (SEC) over its popular crypto wallet, MetaMask. The SEC claims that since 2020, ConsenSys has been unlawfully operating as a broker and selling unregistered securities via MetaMask.
It’s suggested that ConsenSys accumulated over $250 million from fees by mediating digital asset transactions and providing staking services without the mandatory legal registrations. These unblessed operations have allegedly curbed investors from the necessary protections that come with regulated services. As a result, the SEC is hoping to impose civil penalties on ConsenSys and is seeking a lasting injunction alongside other legal recourse.
The crux of the lawsuit is its alleged brokerage activities via MetaMask’s staking service that began in January 2023. This staking service is said to have allowed ConsenSys to pocket significant fees. On top of these allegations, the SEC cited that ConsenSys intermediated investments in unregistered staking programs from Lido and Rocket Pool, which ultimately deprived investors of necessary safeguards.