SEC Sues Consensys for Failure to Register as Broker and Alleged Violation of Securities Laws in Crypto Staking Programs

The SEC has filed a lawsuit against cryptocurrency firm Consensys, alleging that the company failed to register as a broker for its MetaMask swaps service and did not register the offer and sale of securities through its crypto staking programs. According to the SEC, Consensys collected over $250 million in fees as an unregistered broker through these services.

Consensys operates the popular MetaMask self-custodial crypto wallet, which allows users to store, buy, send, and swap tokens. The company did not immediately respond to requests for comment. In April, Consensys sued the SEC after receiving a formal notice of a planned enforcement action against the company. The lawsuit claimed that the SEC was attempting to regulate ether, the world’s second-largest cryptocurrency, unlawfully through these actions.

The lawsuit was filed in U.S. District Court in Brooklyn, New York by the SEC. The regulator alleges that Consensys violated broker registration requirements and failed to register the offer and sale of securities through its crypto staking programs. Despite receiving notice that the SEC had closed its investigation into the company, Consensys plans to continue pursuing its lawsuit to challenge the SEC’s authority to regulate software interfaces on the ethereum blockchain.