Consensys, the team behind the prominent Web3 wallet MetaMask, announced it has reached a deal to acquire Wallet Guard. Wallet Guard is a security-focused browser extension that helps protect crypto wallets from scams and hacks.
MetaMask will be getting a security upgrade with Wallet Guard’s features. The goal is to “drive user fund losses to zero.”
As part of the acquisition, Wallet Guard’s security features like scam and draining attempt detection will be integrated into MetaMask. Consensys seeks to improve MetaMask’s security and reduce user fund losses from scams and thefts in the Web3 space.
In addition, the Wallet Guard team will be joining Consensys. The team will be working within the MetaMask Product Safety Team to ensure a smooth implementation process.
Always Room For Improvement
Patrick Berarducci, Consensys’ MetaMask and Infura Business Group lead, said the integration of Wallet Guard’s technology would help detect decentralized applications (dApps) that are designed to steal user funds.
Berarducci also expects the extra security layer will also help identify and block phishing attempts, as well as prevent web scrapers from stealing user data.
“Users will be protected from the ever-evolving threats in our ecosystem such as malicious DApps and scams through advanced phishing detection, web scrapers, and blocklist and transaction analysis APIs that allow for an advanced scam detection,” Berarducci stated.
Consensys’ latest move comes amid ongoing concern about crypto hacks and scams in the cryptocurrency industry. According to a report published by Chainalysis in February, scammers stole more than $1.7 billion in crypto assets last year.
Berarducci believes the integration could create a positive impact on user safety in Web3. The advanced features are expected to strengthen the product’s security.
The integration “will be an additional layer of security for our users, in addition to our continued collaborations with security partners with Web3,” said Berarducci.
Last month, MetaMask launched “Pooled Staking,” a new feature that allows users to stake any amount of ETH and earn rewards for contributing to the security of the Ethereum network. The feature is powered by Consensys Staking, which operates over 33,000 Ethereum validators and has over 1 million ETH staked.
The initial launch did not include availability in the US or UK due to regulatory uncertainty in those regions around crypto staking services. However, MetaMask stated it aims to bring the pooled staking feature to users in these regions as soon as the regulation becomes clearer.
Legal Battles With The SEC
MetaMask’s parent company is currently dealing with a legal lawsuit from the US Securities and Exchange Commission (SEC). Late last month, the SEC sued Consensys over alleged violations of federal securities laws.
The agency’s action followed its Wells Notice reportedly sent to Consensys in April, threatening enforcement action against the firm for violating securities laws through its MetaMask Swaps and MetaMask Staking products.
Shortly after receiving the SEC’s formal warning, Consensys sued the SEC, contesting the regulator’s claims and seeking declaratory relief.
Consensys asked the court to declare that Ether is not a security, that Consensys does not act as an unregistered broker-dealer, and to enjoin the SEC from pursuing any enforcement action. Surprisingly, part of its intention was successful.
Around two weeks ago, the SEC officially closed its investigation into the Ethereum Foundation (Ethereum’s Proof-of-Stake). The securities regulator said it would no longer pursue the case, and there would be no securities charges against Ether, Ethereum’s native token.
However, with the latest action, the SEC is unlikely to drop its investigation into Consensys’s services.
According to the latest update in the Consensys vs. SEC case, a judge in O’Connor granted Consensys attorneys’ request to expedite a decision on whether the SEC has jurisdiction over the MetaMask wallet. A ruling is expected by the end of this year or early 2025.
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