CoinDesk reports:
MetaMask, a widely-used wallet in the crypto community, is facing a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against its parent company, ConsenSys, as of yesterday, the 28th. SEC alleges that MetaMask’s Swap and staking products violate federal securities laws, pointing out ConsenSys has operated as an unregistered broker since 2020, facilitating the issuance and sale of unregistered securities through MetaMask.
According to CoinDesk and CoinTelegraph, SEC’s complaint highlights MetaMask’s “Swap” service, enabling direct buying and selling of digital assets within its application. ConsenSys charges fees for this service and has facilitated over 36 million cryptocurrency transactions in the past four years. SEC claims that at least 5 million of these transactions involve “crypto asset securities.”
These crypto asset securities include tokens such as Polygon (MATIC), Mana (MANA), Chiliz (CHZ), Sandbox (SAND), and Luna (LUNA), previously categorized as securities in SEC’s earlier litigations. SEC also suggests that other digital assets may potentially be considered securities.
SEC Targets Staking Services! Lido and Rocket Pool Named
The complaint further alleges that ConsenSys, operating without registration, collected over $250 million in fees from crypto asset brokerage transactions and staking services, depriving investors of essential protections. SEC seeks permanent injunctions, civil penalties, and other equitable relief against ConsenSys for its alleged violations of federal securities laws.
This enforcement action confirms longstanding industry concerns. Despite the unexpected approval of a key document for an Ethereum spot ETF last month, reducing the likelihood of ETH being classified as a security, SEC continues to classify Ethereum-derived liquidity staking tokens as securities, including Lido’s stETH and Rocket Pool’s rETH.
LDO Plummets Nearly 18%, RPL Drops 6%
In the wake of SEC’s charges, Lido (LDO) plunged over 23% last night from $2.43 to a morning low of $1.86, with a current quote of $1.95 as of press time, marking a significant 17.6% decline in the past 24 hours. Rocket Pool (RPL), listed as a primary defendant, experienced a relatively modest 6% decline over the same period, trading at $19.23 at the time of writing. MetaMask, identified as a major defendant, has not issued tokens yet.
