MetaMask Swaps Marketed as 'Best' Crypto Trading Experience, Faces SEC Charges

A. Consensys Solicits Investors And Holds Itself Out As A Place To Buy and Sell Crypto Asset Securities Through Its MetaMask Swaps Brokerage Service.

48. On October 6, 2020, Consensys released MetaMask Swaps to the public.

49. Since then, Consensys has advertised and promoted MetaMask Swaps on its MetaMask website, metamask.io, and social media such as X (formerly, Twitter) as a way for investors to participate in the markets for crypto assets, including crypto asset securities.

50. In its October 6, 2020, launch announcement, Consensys claimed that MetaMask Swaps “offers [investors] the best trading experience in Defi” (referring to so-called “decentralized finance”).

51. More specifically, Consensys stated that the MetaMask Swaps platform offered investors the “best prices” and “deepest liquidity.”

52. The announcement concluded: “MetaMask enables more trades more efficiently by providing an optimized path for every trade.”

53. Consensys conveyed similar promotional messages on its website, at least as of December 2023

54. Its website stated, “Find the best price every time. Swaps ensures that you always have access to the largest selection of tokens and the most competitive prices.”

55. Its website continued to explain that, as part of its efforts to “locate the best trade,” Consensys “sources the best prices and determines which liquidity source is the most gas efficient.” (“Gas” is the fee that investors pay to record a transaction on the Ethereum blockchain. Gas fees are demand-based and increase as more users seek to use the platform. The higher the gas price paid for the transaction, the faster the transaction is likely to be mined. Gas is not refundable even if a transaction fails.)

56. In a January 2022 blog post, Consensys touted MetaMask Swaps as “The Optimized DeFi Trading Experience” and argued that its methodology increased the likelihood of best execution.

57. Consensys also maintains a social media accounts on X called “@MetaMask” and “@MetaMaskSupport” through which it has promoted MetaMask Swaps, apprised investors of new platform developments, and provided customer support.

58. For example, on December 21, 2022, Consensys posted on X, “We’ve expanded the Swaps experience,” including a link to a MetaMask news release on its website, which touted the expansion of the MetaMask Swaps platform capabilities to additional networks.

59. In another December 21, 2022, post on X, Consensys targeted potential investors who may have been unfamiliar with MetaMask Swaps. It stated, “Wait – what even is a Swap?! We got you. Learn all about MetaMask Swaps here.” The accompanying image stated that MetaMask is “[t]he best way to swap your digital tokens” and “Effortless Crypto Swapping and Token Exchange on MetaMask.”

60. Consensys posted another “news” release promoting MetaMask Swaps on its website on July 17, 2023. In a section titled “Unrivaled convenience,” Consensys stated, “Swaps is undeniably convenient. You never have to leave MetaMask to execute your transaction through our vetted group of providers.” The release continued, “Swaps ensures you receive . . . the maximum value for your transaction.”

61. On its MetaMask website and Consensys’s YouTube channel, Consensys has also published a video about its MetaMask Swaps service in which it casts MetaMask Swaps as, in essence, a broker of crypto assets for investors: “Introducing MetaMask Swaps . . . The easiest way to trade Ethereum tokens right from inside your MetaMask Wallet.” This video has been publicly available since March 2021.

62. The video touts the user-friendly nature of the MetaMask Swaps platform and explains that “what makes the [MetaMask Swaps platform] so useful is what it’s doing behind the scenes.”

63. The video narration states (referring to what in the crypto asset markets are called “decentralized exchanges” or “DEXs”) that MetaMask Swaps “compares various DEXs, aggregators, and market makers to find you the best price, with the lowest network fees, and the least slippage.”

64. The video also notes that MetaMask Swaps can split the investor’s trade up “among several providers to give [the investor] access to greater combined liquidity.”

65. The video concludes that MetaMask Swaps does “all that, without you having to, well, think about it, really.”