In a surprising turn of events, The US SEC has sued blockchain firm Consensys, according to a report by Reuters. The commission claims that Consensys neglected to register as a broker through its MetaMask swaps service. Additionally, according to the SEC, Consensys neglected to register the offer and sale of certain securities through its cryptocurrency staking programs, which let users lock up tokens for a predetermined amount of time in exchange for income.

Filed in U.S. District Court in Brooklyn, New York, the regulator's complaint said that Consensys had amassed over $250 million in fees as a result of "its conduct as an unregistered broker."

Consensys Previous Defense Against SEC

After claiming to have received formal notice from the SEC indicating its intention to pursue enforcement action against the company, Consensys filed a lawsuit against the agency in April this year. In the case, Consensys had claimed that by pursuing enforcement measures, the SEC was seeking to "unlawfully regulate" ether, the second-largest cryptocurrency in the world in an attempt to defend itself.

The well-known self-custodial cryptocurrency wallet MetaMask, run by Consensys, lets cryptocurrency owners store their assets in addition to purchasing, exchanging, and sending tokens.

SEC's Crackdown on Ethereum-Based Co's Not New

This year, the SEC has made a major effort to target cryptocurrency companies that specialize in Ethereum and decentralized finance. The Securities and Exchange Commission has been harshly targeting the cryptocurrency industry overall for years, but in recent months, it seems that the agency has focused especially on Ethereum.

Just recently, Uniswap Labs, a company that creates decentralized finance infrastructure and operates a well-known DeFi cryptocurrency exchange that lets users keep their coins, provided the SEC with a lengthy explanation of all the reasons why the agency shouldn't take legal action against them. It happened shortly after the commission sent Uniswap a Wells notice, alerting the business to possible violations of US securities laws.

The federal agency has already served Wells notices, brought lawsuits, and reached settlements with a number of cryptocurrency companies this year. The SEC is also pursuing legal action against companies involved in decentralized finance, such as ShapeShift, TradeStation, Uniswap, etc.

Source : Bankless Times - Jun 29, 2024