- The SEC filed a lawsuit against blockchain software company Consensys, alleging the improper sale of securities and acting as an unregistered broker through its digital asset wallet MetaMask.
- Consensys had previously sued the SEC preemptively, claiming the regulator was overreaching its authority, but the SEC proceeded with legal action.
- The SEC’s crackdown has heavily targeted crypto firms focused on Ethereum and decentralized finance this year, including ShapeShift, TradeStation, and Uniswap.
The Securities and Exchange Commission (SEC) has filed a lawsuit against blockchain software company Consensys, alleging improper securities sales. This adds Consensys to the SEC’s growing list of crypto industry targets amid an escalating regulatory crackdown.
Background on Consensys Lawsuit
The SEC sued Consensys in a Brooklyn federal court, claiming the company engaged in unregistered securities offers and sales. It also alleges Consensys acted as an unregistered broker through its MetaMask digital wallet.
Specifically, the regulator says Consensys violated securities laws by failing to register as a broker and register its securities offers/sales.
In April, Consensys preemptively sued the SEC over claimed overreach after getting subpoenas and a Wells notice last year. But on June 18, Consensys declared victory, saying the SEC Enforcement Division would not pursue action over Ethereum 2.0.
Consensys now calls the SEC’s lawsuit “regulatory overreach” and an “anti-crypto agenda.” It expresses confidence it did not need to register MetaMask as a securities broker.
SEC Crypto Industry Crackdown
The SEC has heavily targeted ethereum and decentralized finance crypto companies this year via Wells notices, lawsuits, and settlements. Firms affected include ShapeShift, TradeStation, and Uniswap.
Reportedly, the Ethereum Foundation is also under SEC investigation. This all signals an expanding regulatory crackdown on the crypto industry.
Conclusion
The SEC continues ramping up enforcement actions against crypto companies, especially those related to ethereum and DeFi. Its lawsuit against Consensys over MetaMask is the latest example of this crypto industry crackdown. How the lawsuit proceeds, along with the SEC’s other recent actions, will shape the regulatory climate for cryptocurrencies going forward.
