The United States Securities and Exchange Commission (SEC) has announced that it is officially walking away from its case against Consensys, the parent company of Metamask. The company was previously charged for acting as an unlicensed broker and selling unregistered securities to its users.
The SEC, after giving final approval, will file a stipulation with the court to close the case. “We were committed to fighting this suit until the bitter end but welcome this outcome. No company wants to be the target of agency enforcement, but at the same time, it was our duty and honor to stand up for blockchain software developers in the hour it was most needed, as I’m sure our industry peers who also stood up against regulatory overreach would tell you,” said Consensys in its statement.
SEC previously charged Consensys for selling unregistered securities
According to a June 2024 filing, the SEC accused Consensys of selling unregistered securities through its Metamask platform. It also accused the platform of acting as an unlicensed broker by offering swaps and other services. The agency mentioned that it had carried out these services since January 2023, working with other platforms.
The SEC mentioned that some of these platforms, Lido and Rocket, issue staking tokens in turn for staked assets. It mentioned that the tokens it issues are freely traded.
The SEC mentioned that Consensys was involved in moving the assets, a move that put it in the regulator’s cross hairs. “Consensys inserted itself squarely into the U.S. securities markets while depriving investors of the protections afforded by the federal securities laws. As this enforcement action shows, we continue to hold non-compliant actors in this space accountable, as we do across the securities market,” former SEC enforcement officer Gubir Grewal said at the time.
In its statement, Consensys said, “Devs both here at Consensys and across the crypto space are building a better world and deserve to have someone in their corner fighting for their rights. That is why we sued the SEC when it became clear that Ethereum was the next target, a lawsuit that caused the SEC to drop their Ethereum investigation.”