Consensys, a prominent figure in the Ethereum software ecosystem, is facing legal action from the U.S. Securities and Exchange Commission (SEC) over its MetaMask wallet and staking services. The SEC filed a lawsuit on Friday, alleging that Consensys acted as an unregistered broker for crypto asset securities through its MetaMask Swaps service.
According to the SEC filing, ConsenSys has engaged in the unregistered offer and sale of securities since January 2023, accruing more than $250 million in fees through its MetaMask Staking service without proper registration as a broker.
This lawsuit arrives amid a pivotal moment in crypto regulation, following the U.S. Supreme Court’s decision earlier in the day to strike down the “Chevron doctrine,” which historically gave federal agencies like the SEC significant autonomy in interpreting their powers.
In response to the SEC’s legal action, Consensys issued a statement asserting that the SEC lacks authority to regulate software interfaces such as MetaMask. Consensys characterized the SEC’s move as regulatory overreach, aiming to redefine established legal standards and expand its jurisdiction through litigation.
Earlier in April, Consensys preemptively sued the SEC after receiving notice of the impending lawsuit regarding MetaMask’s staking programs. The company’s legal challenge also alleged that the SEC had quietly considered Ethereum a security for over a year, suggesting broader implications for the crypto industry.
Consensys acknowledged the lawsuit as predictable, emphasizing the SEC’s steadfast approach toward prominent crypto entities. These legal proceedings underscore the ongoing regulatory tensions and the evolving landscape of cryptocurrency regulation in the United States.
Market participants and stakeholders in the crypto industry are closely monitoring these proceedings, recognizing potential implications for regulatory clarity and the future of decentralized finance platforms like MetaMask. Consensys remains steadfast in its position, prepared to defend its practices amidst regulatory scrutiny.