SEC charges Consensys Software for unregistered securities sales

The SEC has charged Consensys Software Inc. with engaging in unregistered securities offerings and sales via MetaMask Staking.

Additionally, the platform faces charges for operating as an unregistered broker through MetaMask Staking and MetaMask Swaps. The SEC has filed a complaint alleging that since January 2023, the Consensys platform has proposed and sold tens of thousands of unregistered securities.

Rocket Pool and Lido, providers of liquid staking programs, carried out this action. These platforms develop and issue liquid staking tokens, such as rRTH and stETH, in exchange for other staked assets.

Although staked tokens are sealed up and cannot be used or traded, they are liquid staking tokens that have been staked. As the name suggests, you can purchase and sell these tokens without any restrictions.

These staking programs offered funds to Rocket Pool and Lido in exchange for liquid tokens. The complaint alleges that Consensys engaged in the unregistered offering and selling of securities by partaking in the distribution of the programs. 

It continues to state that the platform serves as an unregistered broker for such transactions. The SEC’s Division of Enforcement’s Director also commented on the situation. Gurbir S. Grewal asserts that the enforcement action demonstrates the SEC’s commitment to holding non-compliant parties in the domain accountable, a practice consistent with the securities market.

The SEC has also alleged that Consensys has been a broker for transactions in cryptocurrency securities since October 2020. The platform has provided pricing and other information about these assets to help investors find the “best” quote.

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A federal district court in New York’s Eastern District has filed the latest complaint. The SEC has charged Consensys with violating the registration provisions of the 1933 Securities Act and the 1934 Securities Exchange Act. The regulator seeks penalties and injunctive relief from Consensys. 

Harsh Chauhan

Harsh Chauhan is an experienced crypto journalist and editor at CryptoNewsZ. He was formerly an editor at various industries and has written extensively about Crypto, Blockchain, Web3, NFT and AI. Harsh holds a Bachelor of Business Administration degree with a focus on Marketing and a certification from the Blockchain Foundation Program. Through his writings, he hold the pulse of rapidly evolving crypto landscape, delivering timely updates and thought-provoking analysis. His commitment to providing value to readers is evident in every piece of content produced.

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