Following the SEC lawsuit the place Consensys is accused of working as an unregistered dealer by means of its MetaMask software program, the agency has issued a response.
The SEC accused MetaMask of finishing up actions comparable to securities brokerage with out the suitable registrations by means of its swap and staking providers. Moreover, this authorized motion, filed within the U.S. District Court for the Eastern District of New York, follows a Wells discover Consensys obtained in April.
SEC’s Lawsuit Against Consensys
According to the SEC, Consensys, by way of MetaMask, facilitated over 36 million crypto asset transactions, together with 5 million that concerned crypto asset securities, with out the required registration. These actions are mentioned to have earned Consensys greater than $250 million in transaction charges.
The SEC is particularly involved about MetaMask’s Swaps and Staking providers as these, within the view of the regulator, contain the sale of unregistered securities tokens, together with CHZ, LUNA, MATIC, MANA, and SAND.
🚨NEW: The @SECGov has formally charged @Consensys with violating securities legal guidelines by working as an unregistered dealer seller and interesting within the provide and sale of securities by means of its @MetaMask platform.
This was anticipated, following the Wells discover Consensys obtained in… pic.twitter.com/1Fi4cvp3ek
— Eleanor Terrett (@EleanorTerrett) June 28, 2024
Besides instantly facilitating transactions, MetaMask Swaps is alleged to act as an middleman by looking for the most effective change charges and managing clients’ property by means of sensible contracts. The staking facet of MetaMask, which concerned collaborations with entities similar to Lido and Rocket Pool, reportedly additionally concerned the provide and sale of securities by means of staking applications that have been additionally unregistered.
Consensys’s Defense and Legal Strategy
As a results of the SEC’s authorized actions, Consensys has come out in help of their authorized stance, claiming that the SEC can’t regulate software program interfaces like MetaMask as brokers. The firm has determined to go to court docket in Texas for this very matter, stressing that this case will not be solely very important for Consensys however for the whole web3 business.
Consensys claims that what the SEC has finished is to overstep its regulatory mandate and alter the authorized precedent that has been set. The firm has taken the place that as a software program interface it doesn’t translate to being a securities dealer therefore clearing up the allegations.
Consensys totally anticipated the SEC to observe by means of on its menace to declare our MetaMask software program interface should register as a securities dealer. The SEC has been pursuing an anti-crypto agenda led by advert hoc enforcement motion.
This is simply the most recent instance of its regulatory…
— Consensys (@Consensys) June 28, 2024
The authorized battle with the SEC is going down on the background of the rising strain from the regulatory authorities on the cryptocurrency market. This lawsuit is comparable to different high-profile instances similar to the present case in opposition to Coinbase. Consensys has additionally beforehand sued the SEC in Texas claiming that MetaMask Swaps and Staking will not be brokers as they’re software program instruments, with reference to the case SEC v. Coinbase.
Read Also: SEC Sues ConsenSys For Conducting Securities Via MetaMask
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