SEC Sues Consensys Over MetaMask Staking, Broker Allegations

The SEC has sued Consensys alleging MetaMask's Swaps and Staking products violated federal securities laws, and also targeted Lido and Rocket Pool.

: The SEC sued Consensys for MetaMask's Swaps and Staking features, claiming they violated securities laws. The lawsuit also named Lido and Rocket Pool, labeling their stETH and rETH tokens as unregistered securities. Consensys had previously attempted to block this suit and argues the SEC is overreaching its authority.

The U.S. Securities and Exchange Commission (SEC) has sued Ethereum software provider Consensys, alleging its MetaMask service acted as an unregistered broker involved in the sale of securities. The suit also called out Ethereum staking services Lido and Rocket Pool, which power MetaMask's staking feature, alleging their stETH and rETH tokens are unregistered securities.

Consensys, led by Joe Lubin, had previously sued the SEC to block this action, arguing that MetaMask’s software does not constitute a securities broker. The SEC alleged that MetaMask facilitated over 36 million crypto transactions, with at least five million involving unregistered securities like Polygon, Mana, Chiliz, Sandbox, and Luna.

MetaMask’s integration with Lido and Rocket Pool was also alleged to create investment contracts through liquid staking tokens. Consensys disputes this, arguing the SEC is attempting to expand its jurisdiction and redefine legal standards. The lawsuit reaffirms the SEC's aggressive stance on regulating the crypto industry, despite previous settlements with other crypto platforms.