Consensys a Cryptocurrency Company Faces Lawsuit by the US Securities and Exchange Commission as Regulatory Authorities Intensify Industry Crackdown

Joseph Lubin, co-founder of Ethereum and CEO of blockchain company Consensys, has been targeted by the US Securities and Exchange Commission (SEC) as part of their ongoing crackdown on the cryptocurrency industry. On Friday, the SEC filed a lawsuit against Consensys in the Brooklyn federal court, accusing the company of “participating in the offering of securities” and “acting as an unregistered broker” through its digital asset wallet called MetaMask. Court documents state that Consensys violated federal securities laws by not registering as a broker and not registering certain securities offerings and sales. In April, Consensys, a provider of blockchain software, tried to take preemptive action by filing its own lawsuit, accusing the regulatory agency of overstepping its authority. The 10-year-old company claimed that it received three subpoenas last year, along with a Wells notice from the SEC, alleging violations of federal securities laws. So far this year, the SEC has issued notices, filed lawsuits, or reached settlements with many cryptocurrency companies focused on Ethereum and decentralized finance, including ShapeShift, TradeStation, and Uniswap. It is also reported that the agency is investigating the Ethereum Foundation. Less than two weeks ago, Consensys announced a victory in its battle with the SEC. In a statement on June 18, the company wrote, “The SEC’s enforcement division has informed us that it is closing its investigation into Ethereum 2.0 and will not be taking enforcement action against Consensys.” In an email statement, Consensys stated that this action by the SEC is part of its “anti-crypto agenda.” The company said, “This is just the latest example of its regulatory overreach, an overt attempt to redefine established legal standards and expand SEC jurisdiction through litigation.” “We are confident in our position that the SEC has not been authorized to regulate software interfaces like MetaMask.”