Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.
The U.S. Securities and Exchange Commission sued Ethereum software provider ConsenSys over its MetaMask service Friday, alleging the wallet tool was an unregistered broker that"engaged in the offer and sale of securities."in the courthouse in the Eastern District of New York. The SEC alleged in its lawsuit that it offered staking services for Lido and Rocket Pool as investment contracts, suggesting they are also unregistered securities.
According to the lawsuit, MetaMask Swaps allowed investors to trade digital assets with each other through ConsenSys' software. ConsenSys collects a fee for providing these services, and has facilitated more than 36 million crypto transactions over the past four years – though interestingly, it only said that"at least 5 million" of these transactions were in"crypto asset securities.
The SEC said these securities include Polygon , Mana , Chiliz , the Sandbox and and Luna , according to the filing, though it suggested other digital assets might also be securities. Many of these cryptocurrencies have already been named in previous SEC suits as being unregistered securities, though at least some of the issuing entities have disputed this characterization.
"In addition to operating as an unregistered broker with respect to MetaMask Swaps, Consensys performs another traditional function of the securities market: offering and selling securities," the lawsuit said."Specifically, Consensys has offered and sold tens of thousands of securities for two issuers: Lido and Rocket Pool. By this conduct, Consensys acts as an underwriter of those securities and participates in the key points of their distribution.
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