The U.S. Securities and Change Fee sued Ethereum software program supplier Consensys over its MetaMask service Friday, alleging the pockets instrument was an unregistered dealer that “engaged within the provide and sale of securities.” The SEC swimsuit additionally focused Ethereum staking companies Lido (LDO) and Rocket Pool (RPL), the third-party platforms MetaMask makes use of to energy its staking function.The enforcement motion represents the SEC’s newest try and categorize a broad swath of the crypto market as securities. After the shock Ether ETF approval final month, the swimsuit additionally confirmed lingering suspicion that the SEC would possibly nonetheless try to position liquid staking derivatives of ETH, like Lido’s stETH token, below its regulatory remit. The company has already pressured settlements tied to staking companies, together with with Kraken, whereas Coinbase ended its staking companies in some states after making a cope with state securities regulators.MetaMask is the most-used pockets for Ethereum and a number of different blockchains. Along with providing customers the power to retailer cryptocurrency purchased on different platforms, MetaMask lets customers purchase and promote digital property instantly in-app through its “Swaps” service – one of many key options at problem within the SEC’s lawsuit, which it filed Friday within the U.S. courthouse within the Jap District of New York.Consensys collects a charge for offering this service and, in keeping with the SEC’s swimsuit, facilitated greater than 36 million crypto transactions over the previous 4 years. The SEC stated that “at the very least 5 million” of those transactions concerned “crypto asset securities.”The SEC stated these securities embrace Polygon (MATIC), Mana (MANA), Chiliz (CHZ), the Sandbox (SAND) and Luna (LUNA), although it urged different digital property may also be securities. Most of the cryptocurrencies named in Friday’s swimsuit have already been named in earlier SEC fits as unregistered securities, although at the very least among the issuing entities have disputed this characterization.The SEC additionally scrutinized MetaMask’s “staking” function, which lets customers deposit property to safe the Ethereum blockchain in alternate for curiosity. That function is powered by Lido and Rocket Pool – two of the most important names in decentralized finance. MetaMask customers can deposit into these third-party staking companies and earn a tradeable receipt on their deposit, referred to as a liquid staking token, in alternate.The SEC stated MetaMask’s Lido and Rocket Pool integrations amounted to “funding contracts,” suggesting the company views their fashionable stETH and rETH liquid staking tokens as unregistered securities.”Since at the very least January 2023, Consensys has supplied and bought tens of hundreds of unregistered securities on behalf of liquid staking program suppliers Lido and Rocket Pool, who create and problem liquid staking tokens (referred to as stETH and rETH) in alternate for staked property,” the SEC stated. “Whereas staked tokens are usually locked up and can’t be traded or used whereas they’re staked, liquid staking tokens, because the title implies, might be purchased and bought freely.”A consultant for Consensys advised CoinDesk on Friday that the corporate “totally anticipated the SEC to observe by on its menace to assert our MetaMask software program interface should register as a securities dealer.””The SEC has been pursuing an anti-crypto agenda led by advert hoc enforcement motion,” the consultant stated. “That is simply the newest instance of its regulatory overreach – a clear try and redefine well-established authorized requirements and increase the SEC’s jurisdiction through lawsuit.”Friday’s lawsuit comes simply weeks after Consensys introduced the regulator had ended investigations into the corporate tied to Ethereum, citing two letters the SEC despatched it.These letters from June 18 did warning that the SEC would possibly nonetheless deliver enforcement actions tied to different points. Neither letter talked about MetaMask.Consensys, which is led by Ethereum co-founder Joe Lubin, beforehand sued the SEC in April in search of judicial aid in opposition to the SEC probably calling MetaMask a dealer or saying that its staking service violated federal securities legal guidelines. That lawsuit, filed in Texas, additionally sought a court docket order declaring ether (ETH) to be not a safety and to finish the SEC’s investigation into Consensys.”We’re assured in our place that the SEC has not been granted authority to control software program interfaces like MetaMask,” stated the Consensys consultant. “We’ll proceed to vigorously pursue our case in Texas for ruling on these points as a result of it issues not solely to our firm however the future success of web3.”UPDATE (June 28, 2024, 17:10 UTC): Provides further element all through.UPDATE (June 28, 17:27 UTC): Provides SEC press launch.UPDATE (June 28, 2024, 18:04 UTC): Provides further element all through.UPDATE (June 28, 2024, 18:11 UTC): Provides assertion from Consensys.