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Turning Tables: SEC Sues Consensys

The U.S. Securities and Exchange Commission has filed a lawsuit against Ethereum developer Consensys, alleging that the latter is operating as an unregistered security broker via Metamask.

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In its filing, the SEC states that the agency has deprived investors of “crucial protections” by failing to register as a broker. 

Notably, the agency alleges that Lido and Rocket Pool staking programs are securities due to the fact that investors make an investment of the token in a common enterprise with “a reasonable expectation of profits.”

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“Through its MetaMask Staking program, Consensys also acts as a broker by effecting transactions in the Lido and Rocket Pool investment contracts for the account of others. Consensys solicits potential investors, holds itself out as a place to buy and sell the investment contracts, and recommends which of the two investment contracts will offer the highest rewards,” the SEC said. 

On top of that, the SEC has named Polygon (MATIC), Chiliz (CHZ), and other tokens as examples of unregistered securities. 

Just days before the most recent lawsuit, the SEC announced that it had dropped its investigation into Ethereum 2.0, which was hailed as a major win for developers by Consensys. However, Consensys founder Joseph Lubin stressed that the fight for a “supportive regulatory environment” was far from over. 

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As reported by U.Today, the famous Ethereum studio took the SEC to court back in April, accusing the regulator of trying to harm the Ethereum ecosystem. It was looking for a court order that would prevent the agency from suing Consensys over MetaMask Swaps or Staking. 

The price of Ethereum is down 2% over the past 24 hours, according to CoinGecko.

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