In a major blow to the cryptocurrency industry, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Consensys, accusing them of operating as an unregistered broker for their MetaMask swaps service. The SEC also claimed that Consensys failed to register the offer and sale of securities through their crypto staking programs, which allow users to lock up tokens in exchange for yield. The complaint, filed in U.S. District Court in Brooklyn, New York, stated that Consensys had collected over $250 million in fees as an unregistered broker.
In response to the lawsuit, Consensys remained silent on the allegations and continued their legal battle against the SEC. In April, Consensys sued the SEC after receiving a notice of an impending enforcement action. The firm claimed that the SEC was attempting to unlawfully regulate ether, the world’s second largest cryptocurrency, through enforcement actions.
On June 19th, Consensys announced via social media that the SEC had closed its investigation into the company. However, despite this news, Consensys pledged to continue their legal fight against the SEC in pursuit of a court ruling that would clarify their regulatory status and protect user rights on the ethereum blockchain. This case has significant implications for both Consensys and the broader cryptocurrency industry as it sets a precedent for how regulators will approach software interfaces built on blockchain technology.