SEC Sues ConsenSys for Unregistered Brokerage and Securities Violations with MetaMask

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against ConsenSys, the company behind the popular Ethereum wallet MetaMask, alleging that the service functioned as an unregistered broker and offered unregistered securities through its staking service. The SEC claims that MetaMask's staking services for Lido and Rocket Pool constitute investment contracts and are therefore unregistered securities. The lawsuit alleges that ConsenSys has earned over $250 million in fees from these activities. This legal action comes shortly after ConsenSys announced the SEC had closed investigations related to Ethereum, citing letters received from the regulator. However, these letters warned that further enforcement actions might be taken for other issues, and MetaMask was not explicitly mentioned. The SEC's allegations raise significant concerns about the regulatory landscape surrounding crypto and DeFi platforms, particularly concerning the classification of staking services as securities. ConsenSys has yet to respond publicly to the lawsuit, but this development could have far-reaching consequences for the industry.