Consensys, the parent company of MetaMask, a widely used wallet in the cryptocurrency community, was formally sued by the U.S. Securities and Exchange Commission (SEC) yesterday (28th). The SEC accused MetaMask's Swap and pledge products of violating federal securities laws, and pointed out that Consensys has been operating as an unregistered broker since 2020, engaging in the issuance and sale of unregistered securities through MetaMask.
According to Coindesk and Cointelegraph, the SEC mentioned in the indictment that MetaMask allows users to buy and sell digital assets directly within the application through its "Swap" service. Consensys charges fees for this service and has facilitated more than 36 million cryptocurrency transactions in the past four years. The SEC claims that at least 5 million of these transactions involved "crypto-asset securities."
These crypto-asset securities include tokens such as Polygon (MATIC), Mana (MANA), Chiliz (CHZ), Sandbox (SAND), and Luna (LUNA), which have been classified as securities in previous SEC lawsuits. The SEC also hinted that some other digital assets may also be considered securities.
SEC goes after staking services! Lido and Rocket Pool are named
The indictment also states that Consensys collected more than $250 million in fees through unregistered crypto asset brokerage transactions and staking services, depriving investors of important protections. The SEC seeks a permanent injunction, civil penalties, and other equitable relief for Consensys' alleged violations of federal securities laws.
The enforcement action confirms long-standing industry concerns. Although the key documents for the Ethereum spot ETF were unexpectedly approved last month, reducing the possibility of ETH being classified as a security, the SEC is still trying to treat Ethereum-derived liquidity staking tokens as securities, including Lido's stETH and Rocket Pool's rETH.
LDO plunged nearly 18%, and RPL fell 6%
Affected by the SEC's allegations, Lido (LDO) plunged more than 23% from $2.43 last night, hitting a low of $1.86 this morning, and was quoted at $1.95 before the deadline, a sharp drop of 17.6% in the past 24 hours; Rocket Pool (RPL) fell relatively less in the past 24 hours, about 6%, and was quoted at $19.23 at the time of writing. MetaMask, listed as the main defendant, has not yet issued tokens.
