The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Consensys, the parent company of the popular cryptocurrency wallet MetaMask, alleging that it has been operating as an unregistered broker and engaging in unregistered securities transactions.

According to the SEC's complaint, Consensys facilitated over 36 million crypto asset transactions, including 5 million involving securities, without proper registration as a broker. The SEC claims that Consensys collected over $250 million in transaction fees through its MetaMask Swaps and MetaMask Staking platforms, which it alleges were operating as unregistered brokerage and securities offerings, respectively.

The SEC argues that Consensys deprived investors of crucial protections mandated by federal securities laws, such as disclosure requirements and regulatory oversight. The regulator is seeking a permanent injunction, civil monetary penalties, and other relief to address these alleged violations.

Consensys has disputed the SEC's claims, stating that the regulator is attempting to "redefine well-established legal standards and expand the SEC's jurisdiction via lawsuit." The company has initiated legal action against the SEC in Texas to contest the regulation of the Ethereum blockchain, which it plays a crucial role in.

This lawsuit highlights the ongoing regulatory challenges faced by companies operating in the cryptocurrency industry and the importance of compliance with federal securities laws. The outcome of this case may have significant implications for the future of the digital asset market.