The SEC doesn’t want Ethereum to change the face of banking, says Joseph Lubin.
Ethereum founder Joseph Lubin believes that the Securities and Exchange Commission (SEC) is deliberately stifling innovation, which threatens the financial landscape in the United States.
Speaking at FT Live's Crypto and Digital Asset Summit in London, Lubin announced the decision to sue the SEC after Consensys received a Wells notice from the US securities regulator.
“The SEC apparently reclassified Ether as a security without telling anyone about it. Instead of clear speech and clear legislation, they are carrying out a systematic series of enforcement actions,” Lubin said.
Related: Consensys Sues SEC and Commissioners Over Ether Regulation
The CEO of Consensus – the makers of the Metamask wallet – said the enforcement actions were aimed at creating fear, doubt and doubt in the cryptocurrency industry and forcing the company offshore.
Lubin said the action against the SEC is aimed at getting more clarity from US courts, where the Commodity Futures Trading Commission (CFTC) has already classified Ether (ETH) as a commodity.
Timing is questionable.
The CEO of Consensys has highlighted the upcoming deadline for the regulator to take renewed enforcement action against Ethereum to make a decision on the approval of Ethereum spot exchange-traded funds (ETFs).
“We believe that there is a lot of activity designed to get Etherspot to say that their actions are not very smart so they can deny the EFF,” Lubin explained.
Lubin noted how much capital has flowed into the ecosystem following the SEC's approval of spot Bitcoin ETFs:
“I think they're concerned that a lot of attention and capital will flow into our ecosystem, given that it's improving so much in terms of success and usability.”
Lubin also speculated that the prospect of banking industry customers using decentralized financial structures to move assets into digital forms could scare off many banks and other financial institutions.
“The SEC probably doesn't want to see a wave of innovation that really changes the landscape,” he said.
Why Consensys needs to win the case
The importance of a positive outcome at the SEC could have far-reaching implications for the cryptocurrency and technology landscape in the US.
Lubin is a dangerous example of the SEC's claims that Coinbase and MetaMask's wallets are operating as broker-dealers. Thinking of software acting as a broker-dealer is “a misconception,” he added.
Related: US SEC Expected to Deny Ether ETFs Position in May
“We have been conflicted about whether we should register MetaMask as a broker-dealer. “It's much cooler if a MetaMask user has to register their wallet as a broker-dealer,” added Lubin.
The CEO of Consensys concluded that the entire tech industry in the US could be affected by the actions of the securities regulator.
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