SEC sues ConsenSys for alleged unregistered securities brokerage

SEC accuses ConsenSys of bypassing investor protections.

SEC sues ConsenSys for alleged unregistered security brokerage

Key Takeaways

  • ConsenSys has brokered over 36 million transactions without SEC registration.
  • The SEC lawsuit claims ConsenSys deprived investors of necessary legal protections.

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The Securities and Exchange Commission (SEC) has initiated legal action against ConsenSys, alleging the company’s involvement in the unregistered sale and brokerage of securities through its MetaMask services.

According to the SEC, since 2016, ConsenSys has operated without the necessary registrations, thereby bypassing crucial investor protections mandated by federal securities laws.

The lawsuit highlights that ConsenSys, through its MetaMask Swaps and MetaMask Staking platforms, has brokered over 36 million transactions, some involving securities, without proper registration. This action has reportedly generated over $250 million in fees for ConsenSys.

The SEC’s filing also details how ConsenSys marketed staking programs for Lido and Rocket Pool, and considers their liquid staking tokens stETH and rETH as securities, as neither Lido nor Rocket Pool has registered these offerings with the SEC.

Therefore, the US regulator asserts that this lack of transparency and compliance has deprived investors of necessary protections, and this motivated the legal action against ConsenSys.

This is a developing story: We’ll give updates on the situation as we learn more.

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