The US Securities and Exchange Commission (SEC) and blockchain software company Consensys have agreed to dismiss a high-profile lawsuit concerning MetaMask. The resolution was announced on February 27, 2025, marking one of the latest regulatory retreats by the SEC under its new leadership.
The Securities and Exchange Commission (SEC) is gradually shifting its cryptocurrency enforcement approach.
Background of the Consensys Legal Dispute
In June 2024, the SEC filed an action alleging that MetaMask operated as an unregistered broker and facilitating the sale of unregistered securities through its staking services.
Their goal was to target MetaMask’s swaps and staking, stating that the platform’s integration with liquid staking protocols like Lido and Rocket Pool violated securities laws by offering returns to users without proper registration.
At the time, the SEC under former Chair Gary Gensler maintained that staking-as-a-service arrangements constituted investment contracts subject to federal securities regulations. Consensys, founded by Ethereum co-creator Joseph Lubin, contested the allegations. In April 2024, the company sued the SEC in Texas.
They sought clarity on Ethereum’s regulatory status and challenged the agency’s jurisdictional claims over MetaMask. Although a Texas court dismissed the case on procedural grounds in September 2024, Consensys continued to litigate the SEC’s parallel lawsuit in New York.
Terms of Dismissal by SEC
Joseph Lubin confirmed the development in a February 27 post on X (formerly Twitter). He stated,
“Consensys has reached a principled agreement with the U.S. SEC to dismiss the securities enforcement case regarding MetaMask.”
The SEC will submit a formal stipulation to the US District Court for the Eastern District of New York, pending approval by the Commission. The SEC’s decision aligns with its recent closure of investigations into other cryptocurrency firms, such as Uniswap, OpenSea, and Coinbase.
Under Gensler, the SEC pursued an aggressive litigation strategy, filing over two dozen crypto-related enforcement actions in 2024 alone. However, the agency’s revised stance emphasizes collaboration with industry stakeholders and clearer regulatory guidance.
Consensys has indicated it will focus on expanding MetaMask’s features, including decentralized identity tools and zero-knowledge proof integrations. The company’s legal team, led by General Counsel Matt Corva, emphasized that the resolution allows developers to build without fear of retroactive enforcement. Consensys will also publish quarterly transparency reports detailing staking rewards and protocol partnerships.
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