SEC files lawsuit against Consensys over MetaMask trading, staking features
The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ethereum infrastructure provider Consensys on June 28, accusing it of failing to register the provision of key services in the MetaMask wallet. The lawsuit comes just two months after the SEC issued a Wells Notice to Consensys, indicating the agency’s intention to sue the ethereum wallet trusted by more than 100 million users around the world.
Source: Eleanor Terrett SEC files lawsuit against Ethereum infrastructure provider Consensys
In a press release, the SEC alleged that Consensys conducted "unregistered securities offers and sales" through its MetaMask staking service, including "tens of thousands of unregistered securities" through liquidity staking providers such as Lido and Rocketpool. In addition, MetaMask’s trading (Swaps) and staking (Staking) services make the company an “unregistered broker” because it provides investment information about crypto assets, facilitates transactions, and collects “digital data” as an unregistered broker. Billions of dollars in costs."
"Consensys inserted itself directly into U.S. securities markets, depriving investors of the protections afforded by federal securities laws," Gurbir S. Grewal, director of the SEC's Division of Enforcement, said in a statement.
The SEC’s lawsuit has significant consequences for Consensys and the entire cryptocurrency industry. The move could set a legal precedent for other cryptocurrency wallets and staking services, signaling increased regulatory intervention in the DeFi industry.
Consensys responded: No surprise! But MetaMask is not a securities broker
In response to the SEC’s lawsuit, Consensys said it was not surprised and strongly opposed the agency’s over-regulatory and anti-cryptocurrency agenda. Consensys representatives pointed out that MetaMask is merely a software interface that provides access to blockchain technology, and is not a broker that conducts securities transactions.
Consensys sued the SEC back in April, seeking a judicial ruling that its pledge and exchange services did not violate securities laws. "We will continue to aggressively pursue our case in Texas because it is critical not only to our company, but to the future success of Web3," the company said on X.
Source: X Consensys stated that it will actively promote the case and fight for the future of the industry
Consensys Defense and Legal Strategy
The focus of Consensys’ defense is that MetaMask only provides a software interface for blockchain technology and should not be classified as a securities broker. The company has filed a lawsuit in Texas seeking a judicial ruling that its pledge and exchange services do not constitute securities transactions.
Additionally, the SEC alleges that Consensys facilitated more than 36 million crypto transactions through MetaMask, at least 5 million of which involved crypto-asset securities, and earned more than $250 million in transaction fees. The SEC believes these services constituted an unregistered offer and sale of securities, including tokens such as $CHZ, $LUNA, $MATIC, $MANA and $SAND.
Consensys emphasized that MetaMask’s staking function is powered by Lido and Rocket Pool, and users will receive liquid staking tokens such as $stETH and $rETH. The SEC considers these tokens to be investment contracts and should be considered unregistered securities.
The legal skirmish comes as the cryptocurrency market faces growing regulatory pressure. Similar high-profile cases include Coinbase’s lawsuit against the SEC. Consensys will continue to defend its position in the legal battle, emphasizing that it provides software tools, not securities brokerage services. This battle is not only about its own interests, but also about the core operating model of the entire cryptocurrency industry.
