The U.S. Securities and Exchange Commission (SEC) sues crypto company ConsenSys

Time and place of prosecution: Time: On June 29, 2024.

Place: Federal Court in Brooklyn, U.S.

Reason for prosecution: The SEC accused ConsenSys of "participating in securities offerings" and "acting as an unregistered broker" through its digital asset wallet called MetaMask. The SEC believes that ConsenSys violated federal securities laws because it was not registered as a broker and did not register the offer and sale of certain securities.

Crypto products involved: The lawsuit specifically involves ConsenSys' crypto product MetaMask.

Background of ConsenSys: ConsenSys is a major supporter of the Ethereum blockchain. Its CEO is Joseph Lubin, who is also a co-founder of Ethereum. ConsenSys has made great contributions to the construction of Ethereum's back-end infrastructure and has provided financial support for many small projects within the ecosystem.

ConsenSys' position: ConsenSys tried to preempt the lawsuit with its own lawsuit before the lawsuit, accusing the SEC of overstepping its authority. ConsenSys believes that the SEC's allegations are based on MetaMask's Swap and Staking functions involving transactions of unregistered securities, but ConsenSys is dissatisfied with this and believes that MetaMask has not violated federal securities laws.

SEC's position: The SEC has previously investigated the securities status of Ethereum, and the investigation into Ethereum 2.0 ended on June 18, deciding not to take enforcement action against ConsenSys. However, the SEC's attention to Ethereum has not diminished, especially after Ethereum switched from proof of work (PoW) to proof of stake (PoS), regulators have paid more attention to this network.

Litigation results: Currently, the lawsuit is ongoing and the results have not yet been determined.