SEC vs. Ethereum: Lubin Denounces Bullying Strategies and the Classification of Ether as a Security

At a recent conference at FT Live in London, Joseph Lubin, co-founder of Ethereum and CEO of Consensys, expressed significant concerns about the US Securities and Exchange Commission’s (SEC) actions against innovation in the cryptocurrency sector. Lubin, a central figure in the development of blockchain technologies, highlighted that the SEC is acting in a way that inhibits technological progress by classifying Ether, Ethereum’s native currency, as a financial security without properly communicating it to the market.

“The SEC appears to have reclassified Ether as a security without telling anyone that this is the case. They are carrying out a strategic series of enforcement actions instead of open discourse and clear regulation,” Lubin said.

These statements come in a context where Consensys is facing legal challenges with the SEC, after receiving a warning from Wells, a formal notification that it may be on the verge of facing legal action from the regulator.

Lubin criticized the SEC for using tactics that he said aim to sow fear, uncertainty and doubt among crypto market participants. The objective of these actions would be, according to Lubin, to “paralyze” innovation and force the operations of crypto companies outside the United States.

Additionally, Lubin raised concerns about the possible influence of SEC rulings on future approvals of Ether exchange-traded funds (ETFs). “We believe there is a flurry of activity designed to allow them to say that their action was not capricious in the very likely event that they deny Ether spot ETFs,” he explained. This point is crucial, as a denial could mean a major setback for the industry.

The outlook for Consensys and the Ethereum ecosystem could become even more complicated if the SEC manages to set a precedent for digital wallets like MetaMask to operate as brokers. “We are in disagreement over whether to register MetaMask as a broker. If every MetaMask user has to register their wallet as a broker, it will be scary,” Lubin emphasized.

This clash is not just an isolated issue for Consensys, but has the potential to affect the entire technology industry in the United States, profoundly transforming the way digital and financial innovations are regulated and perceived in the country.

Disclaimer:

The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing in or trading cryptocurrencies carries a risk of financial loss.