Ethereum's Co-Founder Accuses SEC of Hindering Innovation, Files Lawsuit
Summary:
Joseph Lubin, Ethereum's co-founder, suggests that the United States Securities and Exchange Commission (SEC) is obstructing innovation that could disrupt the traditional financial system. He discussed these concerns at FT Live’s Crypto and Digital Asset summit in London and highlighted Consensys's decision to sue the SEC after receiving a Wells notice. Lubin believes the SEC is leading by enforcement, creating fear and pushing companies overseas. He emphasized the need for a positive outcome for the U.S. tech industry, cautioning that the SEC's claims that digital wallets are acting as broker-dealers could set a dangerous precedent.
Joseph Lubin, Ethereum's co-founder, suggests that the United States Securities and Exchange Commission (SEC) is deliberately stifling innovation which poses a threat to the conventional financial infrastructure. This perspective was expressed during his address at FT Live’s Crypto and Digital Asset summit in London, where he elaborated on Consensys’s choice to initiate a legal action against the SEC subsequent to receiving a Wells notice from the American regulator of securities. In Lubin's words, the SEC has surreptitiously redefined Ether as a security and follows a programmed enforcement scheme instead of engaging in transparent discussion and crafting clear rules.
The chief executive of Consensys — the company behind the popular MetaMask wallet — posited that these regulatory measures aim to foster anxiety, confusion, and skepticism within the crypto industry, as part of a strategy to hinder its growth and push the organization out of the country. Lubin also underlined the company's reaction towards SEC's actions, a litigation meant to secure further clarification from the American courts given that Ether (ETH) was previously designated as a commodity by the Commodity Futures Trading Commission (CFTC).
The CEO of Consensys remarked upon the imminence of the SEC's deadline to rule on the acceptance of Ether spot exchange-traded funds (ETFs) as a significant factor influencing the regulatory body's renewed action against Ethereum. Lubin infers a purposeful acceleration in activity designed to establish a rationale, in anticipation of the SEC's probable denial of the future Ether spot ETFs.
According to Lubin, the SEC's worries stem from the influx of capital into their ecosystem after Bitcoin spot ETFs approval. He theorizes that the SEC may be wary of a similar flood of attention and investment benefiting their ecosystem, which is currently undergoing a significant improvement in scalability and usability. Lubin further opined that the potential shift of banking customers to digital assets via decentralized financial systems might be unsettling to banks and financial bodies. He believes the SEC likely wishes to avoid the wave of innovation which could noticeably alter the financial landscape.
Lubin emphasized that coming out victorious in their lawsuit against the SEC is vital, as it would have profound repercussions on the American crypto and tech industries. He pointed out that the SEC's allegations accusing Coinbase and MetaMask’s wallets of operating as broker-dealers could establish a questionable precedent. He dismissed the idea of a software application functioning as a broker-dealer as nonsensical. The contentious debate over the necessity of registering MetaMask as a broker-dealer could have a chilling effect on users, Lubin warned.
The CEO of Consensys concluded that the technology industry nationwide could suffer from the implications of the securities regulator's approach.
Published At
5/9/2024 5:22:27 PM
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