Consensys, the parent company of Metamask, the most commonly used little fox wallet by cryptocurrency users, was officially sued by the U.S. Securities and Exchange Commission (SEC) yesterday (28). The SEC accused MetaMask's Swap and pledge products of violating federal securities laws. Consensys has been operating as an unregistered broker since 2020 and has engaged in unregistered securities issuance and sales through MetaMask.

Background of the SEC’s allegations

The SEC's charges are mainly aimed at some cryptocurrency projects suspected of violating securities laws. The SEC believes that these projects failed to comply with US securities laws when conducting ICOs (initial coin offerings) and other financing activities, failed to fully disclose relevant risks and financial information, and misled investors. This is not the first time that the SEC has taken such enforcement actions, but this time the scope of the projects involved is wider and the impact is greater. To learn more about the logic of cryptocurrency investment, please visit my homepage! 🌟

Why are staking concept coins impacted?

Staking is an emerging mechanism in the cryptocurrency field that allows coin holders to earn rewards by locking their crypto assets. Lido DAO and Rocket Pool are representative projects in this field. Lido DAO provides users with Ethereum 2.0 staking services, while Rocket Pool is a decentralized Ethereum 2.0 staking protocol.

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Since staking projects usually involve large-scale token issuance and financing activities, and these activities are often carried out globally, they are easy targets for regulators. The SEC's allegations have hit investors' confidence in staking projects, causing them to sell their tokens, causing a sharp drop in prices.

LDO plunged nearly 18%, RPL fell 6%

Affected by the SEC's allegations, Lido (LDO) plunged more than 23% from $2.43 last night, and fell to $1.86 this morning. It was reported at $1.95 before the deadline, a 17.6% drop in the past 24 hours; Rocket Pool (RPL) fell relatively less in the past 24 hours, about 6%, and was temporarily reported at $19.23 at the time of writing. MetaMask, which was listed as the main defendant, has not yet issued a coin.

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Summarize

For the entire digital currency market, the impact of this incident is obvious. The market shock is not only the fluctuation of digital currency prices, but also the investors' concerns about market stability and regulatory transparency. As an emerging field, the digital currency market needs more regulations and transparency to establish a more robust and healthy development environment.

However, no matter how the market changes, the technology and concepts represented by digital currency will not disappear because of this incident. The future trend of blockchain technology, decentralization and digital finance is still clearly visible. This incident may be a "cold winter" in the development of the digital currency market, but it may also be the only way for the market to transform.

What investors need at this moment is calmness and rationality. Market fluctuations are temporary, but the technology and innovation represented by digital currency are long-lasting. Perhaps this incident is an opportunity for the digital currency market to mature and standardize. It is a good opportunity for the market to re-examine its own problems and solve them, and it is also an important step in leading the digital currency market towards maturity.

Finally, there are still many things that are not written down, such as specific opportunities and specific decisions. These things are often not something that can be summarized in one article.