🌎 Cryptocurrency Prices Drop as SEC Sues Ethereum’s Consensys

Lido DAO (LDO) and Rocket Pool (RPL) prices have experienced significant declines on Friday. As of now, LDO is down by 15% and RPL by 10%, influenced by recent regulatory news.

Ethereum (ETH) has also seen a decrease, losing nearly 3%. Other cryptocurrencies such as Maker (MKR), Uniswap (UNI), and Arbitrum (ARB) have traded lower as well. The downturn is linked to the US Security and Exchange Commission (SEC) filing a lawsuit against Consensys, the Ethereum software company behind the MetaMask crypto wallet.

SEC Sues Consensys Post Ethereum 2.0 Investigation

The SEC concluded its investigation into Ethereum 2.0, indicating a shift in its outlook on altcoins. Earlier in May, the SEC approved spot Ethereum ETFs for the US market. Despite this, there was an overhang due to the SEC’s Wells Notice against Consensys, suggesting potential enforcement action. The regulator outlined its stance regarding MetaMask, Consensys’ crypto wallet, and staking service platform.

Lido and Rocket Pool Prices Plummet

Lido (LDO) and Rocket Pool (RPL) are among the Ethereum-related cryptocurrencies that surged a few days ago despite a market-wide dip. The gains followed Consensys’ announcement that the SEC had ended its Ethereum 2.0 probe. LDO rose from around $1.85 to highs of $2.40, while RPL jumped from $26.50 to above $30.00, propelled by other positive catalysts.

SEC’s Allegations Against Lido and Rocket Pool

In the lawsuit filed at the United States District Court Eastern District of New York, the SEC alleged that “Consensys violated federal securities laws” by failing to register as a broker-dealer and offering unregistered securities. Specifically, the SEC stated that Consensys offered and sold tens of thousands of securities for two issuers: Lido and Rocket Pool. The regulator also mentioned that the staking operations of Lido and Rocket Pool with ETH imply that investors expect to earn profits, which are tied to the managerial efforts of the two protocols.