CoinDesk Report:
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against ConsenSys for offering services on the popular Ethereum wallet, Metamask. The commission also alleges that the blockchain developer acted as an unregistered broker-dealer, selling “thousands of unregistered securities” for Lido and Rocket Pool.
Lido DAO is a decentralized staking platform for Ethereum and has become one of the highlights of the U.S. authorities’ legal actions against prominent cryptocurrency players. The problematic institution is the U.S. Securities and Exchange Commission, which issued a press release announcing legal action against ConsenSys.
Due to the products on the popular Ethereum wallet, Metamask, developed by ConsenSys, regulatory authorities have taken action against the blockchain development company. The U.S. Securities and Exchange Commission claims that ConsenSys engaged in “unregistered securities offerings and sales through a service called MetaMask Staking, and operated as an unregistered broker through MetaMask Staking and another service called MetaMask Swaps.”
It is worth noting that the cryptocurrency market has been anticipating legal action by the U.S. Securities and Exchange Commission against ConsenSys. The company received a Wells notice regarding Metamask in April and recently confirmed that action against Ethereum was unlikely.
SEC Targets Lido and Rocket Pool
Additionally, the commission has also targeted the liquid staking protocols, Lido (LDO) and Rocket Pool (RPL). The regulatory authority claims that ConsenSys acted as an “unregistered broker-dealer” by providing services to these platforms.
Read Lido DAO [LDO] Price Predictions 2023-24
It is worth noting that the betting service feature of Metamask allows users to place bets through Lido and Rocket Pool, which caught the attention of the SEC on these protocols. Furthermore, the commission claims that the blockchain company collected “over $250 million in fees from its unregistered broker-dealer activities.” It states, “ConsenSys acted on behalf of liquidity staking providers Lido and Rocket Pool to offer and sell tens of thousands of unregistered securities, creating and issuing liquidity staking tokens (known as stETH and rETH) in exchange for staked assets.”
This action has had a detrimental effect on the prices of LDO and RPL. Following the announcement of the lawsuit, the value of these coins even plummeted by 10%.
According to CoinMarketCap data, at the time of writing, LDO’s trading price was just below the $2 mark, at $1.98. Prior to the announcement, LDO’s trading price was around $2.30. The coin had a trading volume of over $232 million and experienced a decline in value of over 15% in the past 24 hours.
Similarly, RPL followed the same path and recorded a loss of over 8% at the time of writing. The coin had a trading price of $18.89 and a trading volume of over $7 million. It is worth noting that prior to the SEC’s announcement, the coin’s trading price had surpassed the $20 mark, indicating that it has yet to recover its lost value.
Additionally, the commission also claims that some coins offered on Metamask are securities. These include Polygon (MATIC), Luna (Luna), Chiliz (CHZ), SandBox (SAND), and Mana (Mana). It is worth noting that some of these coins have already been subject to legal action by the U.S. Securities and Exchange Commission in other lawsuits.