Consensys has responded to the SEC’s lawsuit alleging that Metamask’s swap and stacking features function as “an unregistered brokerage and stacking services.” This action by the SEC aligns with its alleged anti-crypto stance, perceived by the crypto supporters as an attempt to crack down on the crypto companies. The lawsuit was filed shortly after the SEC announced the cessation of its investigation into Ethereum.
In a complaint filed on 28 June, the SEC accused Consensys of operating as an unregistered broker and engaging in the unregistered offer and sale of securities through MetaMask Swaps since 2020. The SEC claimed in the lawsuit that the company collected over $250 million in fees through its conduct as an unregistered broker offering and selling securities in the form of crypto asset stacking programs.
In the X post dated 29 June, Consensys blamed the SEC that they were sure that the SEC would threaten Consensys about the requirement of their MetaMask software interface to register as a securities broker. The Consensys blamed the SEC for pushing an anti-crypto agenda through ad hock enforcement actions.
The SEC highlighted that Consensys broke securities law by helping people invest in Lido and Rocket Pool’s unregistered staking programs through its MetaMask software. According to the SEC, Consensys acted as an intermediary in unregistered transactions, depriving investors of necessary protections.
However, Consensys argues the SEC’s lawsuit is a clear example of regulatory overreach, aiming to redefine established legal standards and extend the SEC’s jurisdiction. The company claimed that the SEC has not been granted authority to regulate software interfaces like MetaMask.
Stacking service providers are under scrutiny by regulators. Kraken opted to avoid a lengthy legal battle and settled with the SEC for $30 million. However, Coinbase is contesting the SEC’s crypto enforcement action. Recently, Coinbase filed a lawsuit against the SEC, claiming the regulator has not complied with requests to disclose past crypto investigations and has failed to offer clear regulatory guidance. Additionally, Coinbase is suing the Federal Deposit Insurance Corp.
In response to the recent SEC lawsuit, Consensys vowed to actively defend its case in Texas, stating that the decision is important not only for Consensys but also for the future of web3.
Also Read: Consensys Cheers SEC’s Closure of ETH Investigation
