June 29 Crypto News – Consensys Faces SEC Lawsuit for MetaMask Staking and Unregistered Securities

June 29 Crypto News – Consensys Allegedly Violates Securities Laws with MetaMask Staking, SEC Lawsuit Ensues

June 29 Crypto News – The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Consensys, alleging that its MetaMask service operated as an unregistered securities broker. This legal action, initiated in the Eastern District of New York, also targets Ethereum staking services provided by Lido and Rocket Pool.

Overview of Allegations

The SEC claims that MetaMask facilitated over 36 million cryptocurrency transactions in the last four years, with a significant portion involving tokens like Polygon (MATIC), Mana (MANA), Chiliz (CHZ), the Sandbox (SAND), and Luna (LUNA), which are categorized by the SEC as unregistered securities.

Accusations Against Consensys

According to court filings, Consensys has allegedly sold tens of thousands of unregistered securities since January 2023 on behalf of liquid staking program providers Lido and Rocket Pool through its MetaMask Staking service. This activity reportedly generated over $250 million in fees for Consensys.

Consensys’s Response and Legal Battles

In response to the lawsuit, Consensys expressed expectations regarding the SEC’s claims about MetaMask’s regulatory obligations. The company criticized the SEC’s actions as part of what it perceives as an “anti-crypto agenda,” arguing that the lawsuit represents regulatory overreach.

Impact on Crypto Regulation and Web3

The lawsuit against Consensys is emblematic of broader challenges faced by the cryptocurrency industry amid unclear regulatory frameworks. Consensys, led by Ethereum co-founder Joe Lubin, continues to contest these legal challenges, emphasizing the importance of clarity in regulatory oversight for the future development of Web3 technologies.

Conclusion

These legal battles underscore the tensions between innovation in blockchain technology and regulatory oversight. Consensys and other industry players are actively advocating for a balanced approach to crypto regulation that supports both innovation and compliance with legal standards.

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