Key Points
Joseph Lubin, co-founder of Ethereum, has accused the Securities and Exchange Commission (SEC) of deliberately stalling innovation that could disrupt the existing financial landscape in the United States.
During the FT Live’s Crypto and Digital Asset summit in London, Lubin discussed Consensys’s decision to sue the SEC after receiving a Wells notice from the U.S. securities regulator.
Lubin’s Accusations Against the SEC
According to Lubin, the SEC seems to have reclassified Ether as a security without informing anyone.
He believes that the regulator is strategically enforcing actions instead of facilitating open discourse and clear rulemaking.
The CEO of Consensys, also the creator of the MetaMask wallet, thinks these enforcement actions are designed to instill fear, uncertainty, and doubt in the cryptocurrency industry, with the aim to paralyze it and force the company offshore.
Lubin has expressed that their counteraction against the SEC is aimed at seeking more clarity from U.S. courts, given that the Commodity Futures Trading Commission (CFTC) had previously classified Ether (ETH) as a commodity.
The CEO of Consensys also pointed out the looming deadline for the SEC to make a decision on the approval of Ether spot exchange-traded funds (ETFs) as a motivating factor behind the regulator’s renewed enforcement action against Ethereum.
He suspects that the SEC’s actions are intended to justify their likely denial of the Ether spot ETFs.
Lubin noted that the SEC had observed the significant capital inflow into the ecosystem following the approval of spot Bitcoin ETFs.
He believes that the regulator is worried about the potential influx of attention and capital into the Ethereum ecosystem, which is rapidly improving in terms of scalability and usability.
Lubin also suggested that the possibility of banking industry customers moving assets into digital forms using decentralized finance constructs could intimidate many banks and other financial institutions.
He thinks that the SEC is likely resistant to any wave of innovation that could significantly alter the financial landscape.
The Implications of the Lawsuit
The outcome of Consensys’s lawsuit against the SEC could have far-reaching implications for the cryptocurrency and technology landscape in the U.S.
Lubin argued that the SEC’s allegations that Coinbase and MetaMask’s wallets are functioning as broker-dealers are setting a dangerous precedent.
He believes that the idea of a piece of software acting as a broker-dealer is an “absurd notion”.
Lubin expressed concern over the potential requirement for every MetaMask user to register their wallet as a broker-dealer, calling it “chilling”.
He concluded that the entire technology industry in the U.S. could be affected by the actions of the securities regulator.
