The US Securities and Exchange Commission (SEC) filed a lawsuit against ConsenSys. The commission alleged that the company has operated as an unregistered broker and engaged in the unregistered sale of securities through its <a href="https://news.todayq.com/blockaid-metamasks-security-partner-raises-33-million-to-enhance-user-protection/" rel="noopener noreferrer nofollow">MetaMask</a> Swaps and MetaMask Staking services. SEC sues ConsenSys 
Court filings show that the SEC claims that since 2016, ConsenSys has offered a suite of crypto related services under the MetaMask brand. This includes the MetaMask Swaps platform and the MetaMask Staking service.&nbsp;
As per the commission, these services involve brokering securities transactions and offering securities without proper registration. This is the main reason for violating federal securities laws.
It mentioned that Consensys violated the federal securities laws by failing to register as a broker, while, it failed to register the offer and sale of certain securities.&nbsp;
“Since October 2020, Consensys has acted as an unregistered broker of crypto asset securities through its MetaMask Swaps service. Since January 2023, Consensys has engaged in the unregistered offer and sale of securities in the form of crypto asset staking programs, and acted as an unregistered broker, through its MetaMask Staking service. By its conduct as an unregistered broker, Consensys has collected over $250 million in fees,” stated the US SEC. What are the allegations? 
The commission alleges that through “MetaMask Swaps,” Consensys effects the exchange of one crypto asset for another on the investor’s behalf. However, Consensys asks potential investors in crypto asset securities, holds itself out as a place to buy and sell crypto assets (which include crypto asset securities), recommends trades with—as Consensys itself puts it—the “best” value, accepts investor orders, routes investor orders, handles customers assets, carries out trading parameters and instructions on the customer’s behalf, and receives transaction-based compensation.
It further stated that MetaMask Swaps functions as follows. An investor enters the name and amount of the crypto asset that they wish to sell, as well as the name of the crypto asset that they wish to buy in return. MetaMask Swaps then pulls available rates for the requested exchange from a Consensys curated group of execution venues and other third-party liquidity providers (referred to herein as “third-party liquidity providers”) and displays those rates to the investor, highlighting the option that Consensys deems “best.” With one additional click by the investor, MetaMask Swaps performs the functions necessary to effect the trade, on the investor’s behalf, with the third-party liquidity provider.&nbsp;

ConsenSys faces SEC lawsuit over MetaMask swaps and staking

Todayq News

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