On Friday, the prices of Lido DAO (LDO) and Rocket Pool (RPL) sharply dropped after the SEC sued Consensys. At the time of writing, LDO is down 15% and RPL is down 10%, as the market reacts to the latest regulatory news.
Ethereum (ETH) also slipped, losing nearly 3%, while Maker (MKR), Uniswap (UNI), and Arbitrum (ARB) traded lower. This fall is due to the US Securities and Exchange Commission (SEC) suing Consensys, the Ethereum software company behind the MetaMask crypto wallet.
SEC’s Probe into Ethereum 2.0 Affects Lido and Rocket Pool Prices
The SEC’s conclusion of its probe into Ethereum 2.0 suggested a shift in the regulator’s stance on altcoins. Earlier in May, the SEC had approved spot Ethereum ETFs for the US market, signaling a more favorable outlook. However, the situation remained uncertain due to the SEC’s Wells Notice against Consensys. This notice indicated potential enforcement action and outlined concerns about MetaMask, Consensys’ crypto wallet and staking service platform.
Despite the marketwide dip, Ethereum-related cryptocurrencies like Lido (LDO) and Rocket Pool (RPL) experienced gains a few days ago. The rise followed Consensys’ announcement that the SEC had concluded its Ethereum 2.0 probe. LDO’s price increased from around $1.85 to a high of $2.40, while RPL surged from $26.50 to over $30.00, driven by the positive news and other favorable factors for the altcoins.
SEC Lawsuit Accuses Consensys of Violating Securities Laws
In a lawsuit filed today in the United States District Court for the Eastern District of New York, the SEC accused Consensys of violating federal securities laws. The SEC alleges that Consensys failed to register as a broker-dealer and offered unregistered securities.
According to the SEC’s complaint, Consensys has sold tens of thousands of securities for two issuers: Lido and Rocket Pool. The SEC also noted that Lido and Rocket Pool’s staking operations with Ethereum (ETH) lead investors to expect profits, which are linked to the managerial efforts of these two protocols.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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