Crypto company Consensys sued by SEC as regulator continues industrywide crackdown

Joseph Lubin, co-founder of Ethereum and CEO of blockchain firm ConsenSys.Riccardo Savi | Getty Images for Concordia Summit

Crypto firm Consensys has been added to the SEC's list of targets, as the regulator continues its industrywide crackdown.

The SEC on Friday sued Consensys in federal court in Brooklyn over allegations that the company "engaged in the offer and sale of securities" and "acted as an unregistered broker" through its digital asset wallet called MetaMask.

"Consensys violated the federal securities laws by failing to register as a broker and failing to register the offer and sale of certain securities," the court filing alleges.

In April, Consensys, which provides blockchain software, tried to preempt the SEC's action with its own lawsuit, alleging overreach on the part of the regulator. The 10-year-old company said its suit followed three subpoenas issued last year, plus a Wells notice from the SEC that claimed Consensys was violating federal securities laws.

So far this year, the SEC has sent Wells notices, filed lawsuits, or reached settlements with a host of crypto firms focused on ethereum and decentralized finance, including ShapeShift, TradeStation and Uniswap. The agency is also reportedly investigating the Ethereum Foundation.

Less than two weeks ago, Consensys declared victory in its fight with the SEC.

"The Enforcement Division of the SEC responded by notifying us that it is closing its investigation into Ethereum 2.0 and will not pursue an enforcement action against Consensys," the company wrote in a statement on June 18.

Consensys said in an emailed statement that the action is part of an "anti-crypto agenda" at the SEC.

"This is just the latest example of its regulatory overreach — a transparent attempt to redefine well-established legal standards and expand the SEC's jurisdiction via lawsuit," the company said. "We are confident in our position that the SEC has not been granted authority to regulate software interfaces like MetaMask."