The SEC has reached a preliminary agreement to end its lawsuit against Consensys, the company behind MetaMask wallet, following accusations that its swap and staking services violated securities laws.
By Chimamanda U. Martha
Edited by Marco T. Lanz
Updated
3 mins read
The US Securities and Exchange Commission (SEC) has agreed in principle to drop its lawsuit against Consensys, the company behind the popular decentralized wallet MetaMask. This decision aligns with the regulator’s recent trend of closing cases against crypto firms following a shift in enforcement priorities.
On Thursday, Consensys founder Joseph Lubin, who also co-founded Ethereum, announced that the company had reached a preliminary agreement with the SEC to end the legal dispute. However, the resolution remains subject to final approval. Once confirmed, the SEC will file a stipulation with the court, formally dismissing the case.
I'm pleased to announce that Consensys and the SEC have agreed in principle that the securities enforcement case concerning MetaMask should be dismissed. Subject to the approval of the Commission, the SEC will file a stipulation with the court that effectively closes the case.…
— Joseph Lubin (@ethereumJoseph) February 27, 2025
The case started in June 2024 when the regulator filed a lawsuit against Consensys, accusing the firm of offering unregistered securities through MetaMask’s swap and staking services.
At the time, the SEC claimed that MetaMask facilitated the trading of assets that it classified as securities, thereby violating federal laws.
MetaMask was originally designed as a self-custodial wallet exclusively for the Ethereum blockchain. However, the platform has since expanded its support to other networks, including Binance Smart Chain (BNB Chain) and Solana. This allowed users to store and trade multiple cryptocurrencies in one place.
The platform’s swap enabled direct asset exchanges, which the SEC argued amounted to securities offerings.
According to the lawsuit, MetaMask processed more than 36 million crypto transactions over four years, with at least 5 million involving what the SEC identified as “crypto asset securities.” These assets included Polygon MATIC $0.25 24h volatility: 0.2% Market cap: $427.64 M Vol. 24h: $2.35 M , Decentraland MANA $0.33 24h volatility: 2.0% Market cap: $609.65 M Vol. 24h: $52.25 M , Chiliz CHZ $0.0424 24h volatility: 0.7% Market cap: $405.21 M Vol. 24h: $47.02 M , The Sandbox SAND $0.31 24h volatility: 0.7% Market cap: $755.90 M Vol. 24h: $66.65 M , and Luna LUNA $0.19 24h volatility: 2.3% Market cap: $131.50 M Vol. 24h: $23.28 M .
The SEC also claimed the company violated securities laws through its staking services.
Meanwhile, even before the SEC’s lawsuit, Consensys had taken legal action against the regulator after receiving a Wells Notice, declaring the regulator’s intent to bring enforcement actions against the firm.
In April 2024, the company sued the SEC in an attempt to prevent the regulator from bringing any lawsuit against the Ethereum ecosystem. Consensys argued that the SEC was engaging in regulatory overreach, creating uncertainty for blockchain developers and the broader crypto industry.
However, the lawsuit was dismissed in September 2024 on procedural grounds. Despite this setback, Consensys continued to fight back, ultimately securing an agreement with the SEC to end 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,” Lubin said on X (formerly Twitter).
The SEC’s decision to drop its case against Consensys is part of a broader shift in its regulatory stance under the current administration. Several major crypto firms, including Coinbase and Robinhood, have recently seen investigations against them closed without enforcement actions.
While the SEC remains active in monitoring the crypto industry, its recent decisions suggest a more measured approach to regulation. The outcome of the Consensys case may serve as a precedent for other crypto firms facing legal scrutiny, potentially signaling a more industry-friendly regulatory environment moving forward.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.
