Consensys Faces Lawsuit from US SEC for Blockchain Software Technology

The U.S. Securities and Exchange Commission filed a lawsuit against Consensys, a cryptocurrency firm, on Friday for failing to register as a broker in connection with its MetaMask swaps service. In addition, the SEC alleges that Consensys did not register the offer and sale of certain securities through its crypto staking programs, which allow users to lock up tokens for a period of time in exchange for yield.

According to the SEC’s complaint filed in U.S. District Court in Brooklyn, New York, Consensys collected over $250 million in fees through its unregistered broker conduct. Consensys is known for operating the popular MetaMask self-custodial crypto wallet, which enables crypto owners to store, buy, send, and swap tokens.

Consensys has not yet provided a response to the SEC’s lawsuit. Previously, in April, Consensys sued the SEC after receiving a formal notice indicating that an enforcement action was being considered against the company. The lawsuit claimed that the SEC was unlawfully trying to regulate ether, the world’s second-largest cryptocurrency, through enforcement actions.

Despite receiving a notice on June 19 that the SEC had closed its investigation into the company, Consensys stated that it would pursue its lawsuit to obtain a court ruling stating that the SEC does not have the legal authority to regulate software interfaces built on the ethereum blockchain.