Key Takeaways:
- SEC sues Consensys alleging unregistered securities sales through its MetaMask Swaps service.
- The lawsuit coincides with the U.S. Supreme Court’s decision to strike down the Chevron doctrine
In a recent development, the United States Securities and Exchange Commission (SEC) has filed a lawsuit against Ethereum software firm Consensys.
The SEC alleges that Consensys has acted as an unregistered broker of crypto asset securities through its MetaMask Swaps service. This legal action underscores ongoing tensions between regulatory bodies and the burgeoning crypto industry.
The SEC’s lawsuit accuses Consensys of offering and selling unregistered securities on behalf of liquid staking program providers Lido and Rocket Pool.
These programs issue liquid staking tokens in exchange for staked assets, which the SEC claims fall under the category of securities. By facilitating these transactions, the SEC alleges that Consensys has collected over $250 million in fees without proper registration.
Gurbir S. Grewal, the director of the SEC’s Division of Enforcement, stated that Consensys has positioned itself “squarely into the securities markets.” By acting as an intermediary in these transactions, Consensys is accused of denying investors essential protections typically afforded by registered entities.
Consensys was not taken by surprise by the SEC’s lawsuit. The company had anticipated such actions and previously sued the SEC in April after receiving a Wells notice, which warned of potential enforcement actions.
Consensys has consistently argued that the SEC is overstepping its authority and attempting to extend its jurisdiction through litigation.
A spokesperson for Consensys criticized the SEC’s approach, stating, “The SEC has been pursuing an anti-crypto agenda led by ad hoc enforcement action. This is just the latest example of its regulatory overreach — a transparent attempt to redefine well-established legal standards and expand the SEC’s jurisdiction via lawsuit.”
This lawsuit comes during a period of significant upheaval in the regulatory landscape. On the same day the SEC filed its suit against Consensys, the U.S. Supreme Court’s conservative majority struck down the “Chevron doctrine.”
This doctrine had previously given federal agencies, including the SEC, considerable leeway to interpret their own regulatory powers. The ruling potentially limits the SEC’s ability to independently define the scope of its authority.
