SEC Sues Metamask Parent Company, Web3 Industry Faces New Challenges

While the industry is still paying attention to the U.S. Securities and Exchange Commission ( SEC )'s stance on the ETH ETF, the SEC unexpectedly filed a lawsuit against a certain blockchain technology company on June 29. This company is the developer of a well-known crypto wallet, and the SEC accuses its swap and staking products of violating securities laws, classifying certain liquid staking tokens as unregistered "securities."

This news has sparked widespread discussion in the industry. Data shows that the market sentiment indicators for related projects have seen a significant decline. One project's indicator dropped from 21 to -9, while another plummeted from 33 to -69, reflecting a shift in investor sentiment from relatively optimistic to extremely pessimistic.

The price of the coin also fluctuated accordingly. On the day the lawsuit news was announced, the price of a certain project dropped from a high of $2.43 to a low of $1.86, a decline of over 23%.

As the most widely used cryptocurrency wallet in the Web3 space and an important participant in the ETH staking ecosystem, these projects facing legal challenges will undoubtedly bring uncertainty to their future development and the overall industry outlook.

This lawsuit is not an isolated incident. As early as April 25, the blockchain company filed a lawsuit in the Northern District of Texas because the SEC attempted to classify Ethereum as a security. The company believes that Ethereum does not possess the characteristics of a security, and the SEC had previously made it clear that Ethereum does not fall under its jurisdiction.

The incident dates back to April 10, when the SEC issued a "Wells notice" to the company, indicating it would recommend enforcement action against it. The SEC's main argument is that certain product features of the company involve the trading of unregistered securities, thereby violating federal securities laws. The company, on the other hand, argues that Ethereum should not be considered a security and that its product features do not involve securities trading.

The SEC's lawsuits typically revolve around two core issues: unregistered securities offerings and misleading investors. If the court ultimately rules that Ethereum is a security, it will have far-reaching implications for the entire cryptocurrency ecosystem, including exchange operations, institutional holdings, and ETF approvals.

This lawsuit could become an important turning point for the cryptocurrency industry, marking a stricter regulatory attitude from regulatory agencies towards blockchain companies. It may prompt other companies in the industry to reassess their compliance status and seek cooperation with regulatory agencies to reduce legal risks.

Although the details of the case are not yet fully disclosed, it is certain that the integration of Web3 with the traditional financial system is accelerating, and relevant policies, regulations, and regulatory bodies can no longer ignore this emerging field. In the face of this trend, the industry should maintain confidence while actively responding to challenges.

The conflict between the SEC and blockchain companies highlights the complexity of the cryptocurrency industry in terms of legal and regulatory aspects. In the future, how to strike a balance between innovation and compliance will be a major challenge for the entire industry. We hope that this case can provide beneficial references and guidance for the healthy development of the industry.