Ethereum co-founder and the CEO of Consensys, Joseph Lubin, has hit out at the Securities and Exchange Commission (SEC) for intentionally stifling innovation in the cryptocurrency industry.
Lubin stated the SEC is engaging in strategic enforcement action instead of meaningful discussions with the crypto industry.
SEC Intentionally Stifling Innovation
Lubin made the comments while speaking at FT Live’s Crypto and Digital Asset summit, held in London, and also elaborated on Consensys’s decision to sue the Securities and Exchange Commission after receiving a Wells Notice from the regulator. Lubin stated that the SEC also appeared to have reclassified Ethereum as a security without communicating the change to the public at large and also alleged the regulator was pursuing strategic enforcement actions instead of engaging in discussions with stakeholders and establishing clear rules.
“The SEC appears to have reclassified Ether as a security without telling anybody that that’s the case. They are going about a strategic series of enforcement actions rather than open discourse and clear rulemaking.”
A Climate Of Fear
Lubin said the SEC intends to create fear, uncertainty, and doubt for the crypto industry as it attempts to force the company offshore. The Consensys CEO also stated that the firm’s counter against the SEC is an attempt to get more clarity from US courts, given that the Commodity Futures Trading Commission (CFTC) had previously classified ETH as a commodity. Lubin also talked about the upcoming deadline for the SEC to decide on the approval of spot Ethereum ETFs, adding it was a contributing factor behind the regulator’s latest enforcement action against Ethereum.
“We believe that there’s a flurry of activity designed to enable them to say that their action wasn’t capricious in the very likely event that they deny the Ether spot ETFs.”
He also said the SEC had noticed how much capital had flowed into the system following the approval of spot Bitcoin ETFs and speculated that the prospect of bank customers moving their assets into digital form could significantly impact banks and other financial institutions and transform the financial landscape.
“I think they’re concerned that so much attention and capital will flow to our ecosystem, considering it is improving enormously in terms of scalability and usability. The SEC probably doesn’t want to see a wave of innovation that will really transform the landscape.”
Far-Reaching Implications
If Consensys gets a positive outcome against the Securities and Exchange Commission, it could have significant implications for the cryptocurrency and technology landscape in the United States. Lubin called the SEC’s claims that Coinbase and MetaMask wallets are acting as broker-dealers a “dangerous precedent,” adding that the mere thought of a piece of software acting as a broker-dealer was preposterous.
“We’re at odds over whether we should register MetaMask as a broker-dealer. Should every MetaMask user have to register their wallet as a broker-dealer, it’s chilling.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
