The SEC Comes for Ethereum (Again)

TL;DR

• The SEC just filed a lawsuit against Consensys (creators of MetaMask), claiming that their staking services are “offered and sold as investment contracts and [are], therefore, securities.”

Full Story

If you grew up with a younger sibling, you’re probably familiar with the following sort scenario:

Mom tells you to stop hitting each other → but you still have vengeance to lay down → so start destroying your siblings toys.

(Sure, you just ripped the head off Eric’s beloved childhood teddy bear…but you’re still abiding by mom’s ‘no hitting each other’ decree).

Well, turns out old habits die hard.

The SEC may have stopped going at the throat of Ethereum, but now it’s attacking the companies that support it.

Specifically: Consensys (creators of the world’s most popular Ethereum wallet, MetaMask).

This time around they’re claiming that MetaMask’s staking services are “offered and sold as investment contracts and [are], therefore, securities.”

Now, much to the disappointment of our family, we’re not lawyers…

But this feels like one of the longer shots the SEC has taken in recent memory.

They’ve just categorized Ethereum (and by proxy/precedent, Ethereum-like products) as commodities (‘things’ like oil & gold) — i.e. not securities (enterprises).

Staking pays users interest on their ETH (a commodity), the same way banks pay customers interest on their cash holdings (also a commodity)…

So the SEC is about to go and fight a case where its biggest hurdle is self-imposed (its recent categorization of ETH being a commodity).

We don’t get it. But it’s nice to know they’re likely fighting a losing battle.