- Lubin claims SEC’s measures could push companies abroad and undermine innovation in decentralized finance (DeFi).
- Consensys’ lawsuit against the SEC aims to prevent regulatory interference from stifling technological progress in crypto.
Joseph Lubin, a co-founder of Ethereum, expressed his apprehension regarding the SEC regulatory strategies for the cryptocurrency sector, emphasizing that their methods could significantly hinder its development.
Joseph Lubin stated that the SEC appears to have categorized Ethereum as a security without public notice. This classification has sparked concerns about ETH spot exchange-traded funds (ETFs), which the SEC worries could cause an influx of interest and capital into the cryptocurrency market.
LIVE NOW — Ethereum is Under Attack ⚠️@ethereumJoseph and @MattCorva on the SEC vs Ethereum
The SEC is going after @Kraken, @Coinbase, @Uniswap and @Metamask. They’re trying to turn every non-custodial wallet into a broker-dealer.
But here’s what’s new – Joe and Matt are… pic.twitter.com/eMiQtP9vOZ
— Bankless (@BanklessHQ) May 1, 2024
Lubin criticized the SEC’s recent allegations that popular crypto wallets like Coinbase and MetaMask operate as brokers. He warned that these allegations set a troubling precedent. “The SEC is scouring GitHub repositories of developers who aren’t even building financial applications, looking for products to classify as brokerage firms,” he stated.
At the Crypto and Digital Assets Summit in London, Lubin talked about Consensys’ choice to file a lawsuit against the SEC following their receipt of a Wells notice from the agency. He asserted that these enforcement measures are designed to generate fear and uncertainty, crippling the industry and driving companies to operate overseas.
Lubin also highlighted the timing of the SEC’s enforcement actions, which coincides with its approaching deadline for deciding on Ether ETF approvals. He believes the SEC is preparing itself to argue that their rejection of the ETFs was not arbitrary by pointing to recent enforcement efforts.
According to him, the SEC is concerned about a potential surge in attention and capital into the crypto ecosystem given recent improvements in scalability and usability.
He suggested that the rise of decentralized finance (DeFi) could alarm traditional banks and financial institutions, with customers shifting their assets to digital forms. “The SEC probably doesn’t want to see a wave of innovation that transforms the financial landscape,” Lubin commented.
Lubin concluded that if the SEC’s stance prevails, it could have broad implications for the U.S. tech industry. He dismissed the SEC’s assertion that wallets like Coinbase and MetaMask operate as brokers as “absurd,” adding, “If every MetaMask user had to register their wallet as a brokerage, it would be terrifying.”
"This is not merely about protecting a digital asset. It is about safeguarding the future of innovation in the U.S. An overzealous financial regulator must not hold game-changing technology hostage." – @ethereumjoseph in today's @FThttps://t.co/9yMZT3cIlb
— Consensys (@Consensys) May 7, 2024
Lubin stressed that Consensys needs to succeed in this case, as a positive outcome could set an precedent for the crypto trading market in the U.S. and beyond.
