The U.S. Securities and Exchange Commission (SEC) has recently initiated legal action against Consensys, accusing the company of failing to register as a broker in relation to its swaps service, Dappradar. As per a document filed on June 28 in the US District Court for the Eastern District of New York, the SEC also alleged that Consensys violated regulations through its MetaMask staking service.
In a statement released by the SEC, it was stated, “The Securities and Exchange Commission has formally charged Consensys Software Inc. for participating in the unregistered sale of securities through its MetaMask Stake service, as well as for operating as an unregistered broker-dealer via MetaMask Stake and another service known as MetaMask Swaps.”
The complaint outlined that Consensys was involved in the unregistered sale of securities through Staking of crypto assets, along with functioning as an unregistered broker within the country through MetaMask Stake.
Gurbir S. Grewal, Director of the Division of Enforcement at the SEC, expressed concerns, stating, “By allegedly collecting significant fees as an unregistered broker-dealer and engaging in the unregistered sale of numerous securities, Consensys has directly entered the U.S. securities markets while denying investors the safeguards provided by federal laws.”
Consensys is reportedly planning to counter the SEC’s lawsuit. Following Ethereum’s recent success against the SEC, Consensys intends to proceed with legal action against the regulator. According to information from Fox Business reporter Eleanor Terrett, citing Consensys founder Joseph Lubin, the company is set to pursue legal action against the SEC.
Lubin emphasized that the conclusion of the SEC’s investigation into Ethereum 2.0 is a crucial step but not adequate on its own. He stated that Consensys will persist with the litigation to gain more legal clarity for the cryptocurrency industry.
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