SEC Sues Consensys Over Alleged Securities Violations

The SEC has declared war on ETH staking, filing suit against Consensys, alleging that its MetaMask swaps and staking services violated U.S. securities laws.

What's the scoop?

• The SEC claims that Consensys acted as an unregistered broker through its MetaMask Swaps service and engaged in the unregistered sale of securities via its MetaMask Staking service.
• The SEC alleges Consensys has collected over $250 million in fees from these activities so far.
• Notably, the complaint also identified Lido and Rocket Pool's staking services as unregistered securities, stating that investors expected profits from these projects as common enterprises.
• Just last month, ConsenSys sued the SEC over its regulatory approach to Ethereum and received a Wells notice from the Commission indicating a planned enforcement action.
• ConsenSys recently announced the SEC had ended its investigation into the company but left open the possibility of future enforcement actions.

Bankless take:

This lawsuit highlights the ongoing aggressive stance against crypto projects by Gary Gensler’s SEC. That said, it also makes the recent approval of ETH ETFs appear more like an outlier, perhaps due to growing political pressure around crypto in the U.S. If you thought Gensler was thawing toward the field in light of the ETH ETFs development, think again—he’s continuing to go after decentralized offerings that don’t fundamentally depend on centralized enterprises.