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Ethereum Under Attack: Consensys CEO ‘Protects Financial Landscape’ SEC Criticizes SEC’s Crackdown on Cryptocurrencies
Ethereum co-founder and Consensys CEO Joseph Lubin accused the US Securities and Exchange Commission (SEC). to intentionally stifle innovation in the cryptocurrency industry to protect the existing financial landscape.
Speaking at FT Live’s Crypto and Digital Asset Summit in London, Lubin shed light on his company’s decision to sue the SEC after receiving a Wells Notice from the regulator.
TLDR
- Ethereum co-founder Joe Lubin believes the SEC is intentionally hindering innovation in the cryptocurrency industry to protect the existing financial landscape.
- Lubin argues that the SEC has reclassified Ethereum as a security without adequate disclosure or regulation and is engaging in strategic enforcement actions rather than open discourse.
- Consensys’ reaction against the SEC aims to gain clarity from the US courts, as the CFTC had previously classified Ether as a commodity.
- Lubin suggests that the SEC’s enforcement actions are timed to justify rejecting upcoming Ethereum spot ETFs and that the regulator is concerned about the flow of capital into the rapidly improving Ethereum ecosystem.
- Consensys CEO Warns SEC Charges Against Coinbase and MetaMask Could Set a Dangerous Precedent for the Entire US Tech Sector
According to Lubin, the SEC appears to have reclassified Ethereum as a security without openly communicating this change to the public.
He argues that the regulator is pursuing a series of strategic enforcement actions rather than engaging in open discourse and establishing clear rules.
“It appears that the SEC has reclassified Ether as a security without telling anyone that this is the case. They are pursuing a strategic series of law enforcement actions rather than open discourse and clear regulation,”
Lubin said.
The CEO of Consensys believes that these enforcement actions are intended to create fear, uncertainty and doubt (FUD) in the cryptocurrency industry, in an attempt to cripple companies like Consensys or force them to offshore.
Lubin explained it Consensys’ reaction against the SEC aims to obtain greater clarity from US courts, considering that the Commodity Futures Trading Commission (CFTC) had previously classified Ether as a commodity.
Lubin also highlighted the suspicious timing of the SEC’s renewed enforcement action against Ethereum, suggesting it may be linked to the looming deadline for the regulator to issue a decision on approval of Ethereum spot exchange-traded funds (ETFs).
“We believe there is a flurry of activity designed to allow them to say their action was not capricious in the very likely event they negate spot Ether ETFs,” he said.
The Consensys CEO speculated that the SEC is concerned about the significant attention and capital that could flow into the Ethereum ecosystem, which is rapidly improving in terms of scalability and usability.
He believes the prospect of banking clients moving assets into digital forms using decentralized finance (DeFi) constructs could scare off many banks and other financial institutions.
“The SEC probably doesn’t want to see a wave of innovation that’s really going to transform the landscape,”
– added Lubin.
Lubin also expressed concern about the SEC’s claims that Coinbase and MetaMask wallets act as broker-dealers, calling it an “absurd notion.”
He highlighted the importance of a positive outcome in Consensys’ legal battle against the SEC, as it could have far-reaching implications for the cryptocurrency and technology landscape in the United States.
“We disagree on whether MetaMask should be registered as a broker-dealer. If every MetaMask user had to register their wallet as a broker-dealer, it would be horrifying,”
Lubin warned.
The CEO of Consensys concluded that the entire technology sector in the United States could be affected by the securities regulator’s actions. He argued that the SEC’s enforcement actions are setting a dangerous precedent that could hinder industry innovation and growth.