By Michael Scott
The Ethereum co-founder Joe Lubin labelled the US Securities and Exchange Commission’s (SEC) move to serve crypto firm Consensys with Wells Notice as an attempt to paralyze the industry. Lubin argues that the recent enforcement actions undertaken by the SEC intend to yield fear, uncertainty and doubt (FUD) within the crypto industry.
SEC Appears to Force Crypto Exit
Lubin expressed displeasure with the SEC’s conduct while addressing the Crypto and Digital Assets Summit convened by the Financial Times in London. He admitted his Ethereum-affiliated firm Consensys received a Wells Notice from the securities watchdog terming the move as an effort to prompt them to move off-shore.
Lubin decried the secretive reclassification of the second-largest crypto by market value Ethereum. He clarified the move by Consensys to file the preemptive suit against the Gary Gensler-led SEC, seeking clarity from the US court.
Lubin believes the suit will help establish Ethereum’s classification as a commodity, just as the SEC and the Commodity Futures Trading Commission (CFTC) have stated for years.
Lubin’s criticism of the SEC as forcing crypto exit from the US emerges from the multiple enforcement actions undertaken over the past 12 months. In particular, leading crypto firms, including Binance, Coinbase, Ripple Labs, and Kraken, are victims of enforcement actions.
Rubin cites the recent Wells Notices served to Robinhood, Uniswap Labs and Consensys. They warn of the impending enforcement action that the SEC plots to level against the crypto firms.
Ethereum Co-founder Claims SEC Derailing From Financial Matters
Lubin weighed on the actions where the SEC argues that crypto wallet providers led by MetaMask have conducts matching those of broker-dealers. The Ethereum co-founder terms the SEC’s claim as a preposterous notion. He questioned whether the developer, such as Consensys or the users, should undertake registration of the software piece that one can download and operate autonomously.
Lubin tears into the SEC’s argument that Consensys is facilitating Lido and Rocket Pool in issuing securities by guaranteeing access to the Ethereum-based decentralized finance protocols.
Lubin criticized the recent move by the SEC to inspect the GitHub of software developers behind the protocol’s deeper layers. He termed the initiative an overreach and derailing from the financial matters that resulted in chilling for the software developers.
Ethereum Co-founder Questions Timing of SEC’s Actions
Lubin singled out the timing of actions undertaken by the SEC, indicating that it emerges just days before the May 23 deadline when the regulator is expected to decide on the spot Ethereum exchange-traded fund (ETF) bid. He suggests that the SEC was deploying sideshow activities choreographed to rule out its decision, which would not be capricious if it were to reject the application for spot Ethereum ETFs.
The Consensys founder concluded that the SEC dislikes innovation waves that would disrupt the traditional financial landscape. The regulator appears opposed to approving spot Ethereum ETFs and likely moves by the majority of the banking customers digitizing their assets and moving them into the decentralized finance (DeFi) applications.
Lubin considers that the awareness of monumental transactions yields uncomfortable experiences to the factions stuck in the traditional finance space. Such constitute the proponents of slowing down or shutting down the crypto space.
Lubin downplayed the pessimism of the regulator denying the spot Ethereum ETF. Instead, the Ethereum co-founder predicts an inflection point next year when the courts will likely compel the approval of spot Ethereum ETFs.