Consensys, founded by an Ethereum co-founder, has been hit with charges by the Securities and Exchange Commission (SEC) alleging the offer and sales of unregistered securities via its Metamask staking service.
Metamask offers staking of Ethereum for users to generate “rewards.”
Consensys is one of multiple digital asset firms that are battling the SEC and the current opaque environment in regard to regulating crypto.
This past April, Consensys filed a lawsuit against the SEC challenging the agencies for arbitrarily expanding its jurisdcition as well as its “reckless approach is bringing chaos to developers, market participants, institutions, and nations who are building or already managing critical systems running on Ethereum.”
The SEC claims that Consensys offered and sold tens of thousands of unregistered securities on behalf of liquid staking program providers Lido and Rocket Pool, who create and issue liquid staking tokens (called stETH and rETH) in exchange for staked assets.
The SEC adds that while staked tokens are generally locked up and cannot be traded or used while they are staked, liquid staking tokens, as the name implies, can be bought and sold freely.
The SEC’s complaint alleges that Consensys also operates as an unregistered broker regarding these transactions.
SEC Director of the Division of Enforcement, Gurbir Grewal, said the enforcement action shows, they continue to hold noncompliant actors in accountable, as they do across the securities market.
The SEC has filed the complaint in federal district court in the Eastern District of New York.
Consensys is yet to comment on the lawsuit.