SEC tries to expand crypto jurisdiction with Consensys lawsuit

—,
—by Protos Staff

The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Consensys, alleging that its MetaMask Swap service made it an unregistered broker. This lawsuit from the SEC comes after Consensys’ lawsuit against the SEC in April. 

MetaMask Swaps is a platform that helps facilitate trades of various cryptocurrency assets by aggregating quotes from different decentralized exchanges and market makers. It enables the user to easily select the best price in exchange for a small fee paid to Consensys.

The complaint alleges that Consensys, through the Swaps platform, has ‘collected fees worth over $250 million.’ It also claims that some of these liquidity providers ‘may share a portion of the fees it charges investors.’

ConsenSys says the SEC designated ETH a security but won’t say where

Read more: One year on, the SEC can finally sue Binance — for the most part

According to the complaint, Consensys ‘exercises further discretion over which crypto assets it makes available.’ It highlights that Consensys maintains a ‘token restriction policy’ that details assets that it doesn’t enable trades in. Furthermore, the SEC lists a series of assets it considers securities that Swaps helped enable trades in. These include MATIC, AMP, AXS, BNB, COTI, DDX, FLOW, HEX, LCX, NEXO, OMG, POWR, RLY, XYO, MANA, CHZ, SAND, and LUNA.

The complaint also alleges that Consensys’ ‘MetaMask Staking’ platform sold unregistered securities in the form of tokens for Lido and Rocket Pool. These so-called ‘liquid staking’ tokens enable users to gain access to staking rewards without directly participating in validation. The complaint claims that these schemes represent investment contracts. 

Got a tip? Send us an email or ProtonMail. For more informed news, follow us on X, Instagram, Bluesky, and Google News, or subscribe to our YouTube channel.