MetaMask
Key Data
- Trading Name: MetaMask
- Legal Entity: Consensys Software Inc.
- Activities: Self-custodial Crypto wallet
- Location: USA
- Regulations: unregulated
- Key People:Aaron Davis and Dan Finlay
MetaMask is a widely trusted self-custodial crypto wallet and gateway to blockchain applications. Available as both a browser extension and mobile app, it offers features like secure login, token storage, and token exchange.
It allows users to buy, store, send, and swap tokens easily. MetaMask ensures user control over data by generating passwords and keys locally on the device. It’s popular for interacting with decentralized web applications (Web3) and supports over 100 million users globally. The platform also provides resources for developers and opportunities for community involvement.
MetaMask is a hot wallet, meaning it’s connected to the internet, which makes it more vulnerable to hacks compared to cold wallets.
Key People
MetaMask was developed by Aaron Davis and Dan Finlay in 2016 with the primary goal of providing easier access to Ethereum. The wallet is supported by ConsenSys Inc., a leading Ethereum software company, and a global community of developers and designers. ConsenSys states on its website that its products support “billions of blockchain-based queries.”
Offering
The decentralized nature of MetaMask ensures transparent transactions visible to connected nodes, preventing a single entity from gaining control over the entire wallet system.
Furthermore, MetaMask offers versatility by supporting a wide range of tokens on the ERC-20 protocol and storing non-fungible tokens (NFTs), which can be seamlessly connected to popular marketplaces like OpenSea. The wallet is also compatible with multiple blockchains, including the Binance Smart Chain (BNB), Polygon, Avalanche, and more.
Self-Custody
As a self-custodial wallet, MetaMask does not offer any additional security features. Once again, this should remind users of the risks of safeguarding their own private keys.
In contrast, custodial wallets often come with two-factor authentication, IP/device whitelisting, insurance, and cold storage. But equally, those opting for a custodial wallet do not control their private keys.
Supported Coins
MetaMask supports Ethereum and ERC20 tokens by default. It also supports Arbitrum, Optimism, Binance Smart Chain, Polygon, and Avalanche, but users must manually add these networks. Notably, MetaMask does not support Bitcoin or other top-10 cryptocurrencies like XRP, Cardano, and Solana, which might be a drawback for some users.
Regulation
The SEC alleged that MetaMask acted as an unregistered securities broker and that its staking service violated securities laws.
Customer Reviews
Trustpilot: 1,4 Stars with 500+ Reviews (Poor)
Compliance Issues
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against ConsenSys, the company behind MetaMask, over allegations that MetaMask’s staking service functions as an unregistered securities broker. The SEC claims that MetaMask’s staking service and its decentralized exchange aggregator, MetaMask Swaps, violate securities laws. MetaMask Swaps charges a 0.875% transaction fee, and the SEC argues this constitutes broker activities without proper registration.
The lawsuit highlights the SEC’s ongoing scrutiny of cryptocurrency platforms and services that offer staking and other financial activities without adhering to traditional regulatory frameworks. This legal action reflects broader regulatory challenges faced by the crypto industry as it navigates compliance with existing financial laws.
Data Security Critic
MetaMask has been criticized for collecting user data, specifically IP addresses and Ethereum wallet addresses, via its default RPC provider, Infura. This practice, disclosed in a November 2022 privacy policy update by ConsenSys, raised privacy concerns as it links blockchain activity with personal data. Dan Finlay, co-founder of MetaMask, acknowledged the issue and stated that the data is temporarily stored and not used. He emphasized ongoing efforts to improve privacy and suggested switching to alternative RPC providers to avoid data collection.
Conclusion
Due to ongoing SEC investigations, poor customer reviews, and allegations of user data collection, we have rated MetaMask as orange in terms of compliance and customer satisfaction. The SEC’s scrutiny over MetaMask’s operations, coupled with user dissatisfaction and privacy concerns, underscores the need for heightened caution and vigilance when using this platform.
