CoinJei News Report:
The US Securities and Exchange Commission (SEC) has filed a lawsuit against ConsenSys for providing services on the popular Ethereum wallet, Metamask. The commission also alleges that the blockchain developer acted as an unregistered broker-dealer, selling “thousands of unregistered securities” for Lido and Rocket Pool.
Lido DAO is a liquidity staking platform on Ethereum and has become one of the highlights of the day for US authorities taking legal action against prominent cryptocurrency players. The problematic institution in question is the US Securities and Exchange Commission, which issued a press release announcing legal action against ConsenSys.
Regulatory agencies have taken action against ConsenSys due to products on the popular Ethereum wallet, Metamask, developed by ConsenSys. The US Securities and Exchange Commission claims that ConsenSys engaged in “unregistered securities offerings and sales through a service called MetaMask Staking and operated as an unregistered broker-dealer through MetaMask Staking and another service called MetaMask Swaps.”
It is worth noting that the cryptocurrency market has been anticipating legal action by the US Securities and Exchange Commission against ConsenSys. The company received a Wells notice regarding Metamask in April and only recently confirmed that it is unlikely to take action against Ethereum.
SEC Targeting Lido and Rocket Pool Simultaneously
In addition, the commission also targeted the liquid staking protocols Lido (LDO) and Rocket Pool (RPL). The regulatory agency claims that ConsenSys acted as an “unregistered broker-dealer” by providing services to these platforms.
Read Lido DAO [LDO] Price Prediction 2023-24
It is worth noting that the betting service feature on Metamask allows users to place bets on Lido and Rocket Pool, which caught the attention of the SEC regarding these protocols. Furthermore, the commission claims that the blockchain company collected “over $250 million in fees” from its “unregistered broker-dealer activities.” It states, “ConsenSys acted as a broker-dealer to Lido and Rocket Pool, offering and selling tens of thousands of unregistered securities, creating and issuing liquidity staking tokens (called stETH and rETH) in exchange for the staked assets.”
This action has had a negative impact on the prices of LDO and RPL. Following the announcement of the lawsuit, the value of these coins even dropped by 10%.
According to CoinMarketCap data, as of writing, the trading price of LDO is slightly below the $2 mark, at $1.98. Prior to the announcement of this news, the trading price of LDO was around $2.30. The coin has a trading volume of over $232 million and has declined by more than 15% in value in the past 24 hours.
Similarly, RPL has followed the same path and recorded a loss of over 8% as of writing. The trading price of the coin is $18.89, with a trading volume of over $7 million. It is worth noting that prior to the announcement by the SEC, the trading price of the coin had surpassed the $20 mark, indicating that it has yet to recover its lost value.
Furthermore, the commission also claims that some coins offered on Metamask are securities. These include Polygon (MATIC), Luna (LUNA), Chiliz (CHZ), Sandbox (SAND), and Mana (MANA). It is worth noting that some of these coins have already been subject to legal action by the US Securities and Exchange Commission in other lawsuits.
