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SEC Block Ethereum’s Banking Evolution, Warns Joseph Lubin

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Ethereum co-founder Joseph Lubin criticizes the SEC’s approach, accusing them of prioritizing strategic enforcement over constructive dialogue with the crypto sector.

Lubin suggests that the SEC’s actions hinder rather than facilitate the growth of cryptocurrencies like Ethereum.

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Ethereum Co-Founder Accuses SEC of Hindering Crypto Innovation

Joseph Lubin, the co-founder of Ethereum, has levelled serious accusations against the Securities and Exchange Commission (SEC).

He believes the SEC is intentionally obstructing innovation that threatens the existing financial landscape in the United States.

Speaking at a recent summit in London, Lubin criticized the SEC’s decision to issue a Wells notice to Consensys, the company behind the popular MetaMask wallet.

He accused the SEC of reclassifying Ether as a security without proper notification or transparent rulemaking.

Lubin believes the SEC is pursuing a strategic series of enforcement actions against the cryptocurrency industry rather than engaging in open discourse.

He believes these actions are intended to create fear, uncertainty, and doubt, aiming to “paralyze” companies like Consensys and force them offshore.

Lubin’s criticism stems from the apparent contradiction between the SEC’s approach and the Commodity Futures Trading Commission (CFTC), which had previously classified Ether as a commodity.

Consensys’ lawsuit against the SEC seeks clarity from U.S. courts.

The Ethereum co-founder’s remarks highlight the ongoing regulatory tussle surrounding cryptocurrencies in the United States.

While some agencies view digital assets as commodities, the SEC’s stance is more stringent, potentially hindering innovation in the crypto space.

SEC’s Renewed Crackdown on Ethereum Linked to Impending ETF Decision

According to Joseph Lubin, the SEC’s recent enforcement actions against Ethereum are driven by the looming deadline for approving Ether spot exchange-traded funds (ETFs).

Lubin believes the regulator is attempting to justify its potential denial of Ether spot ETFs by portraying its actions as non-arbitrary.

In Lubin’s statement, “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”.

In addition, Lubin highlighted the significant capital inflow into the ecosystem following the approval of spot Bitcoin ETFs.

He speculated that the SEC might be concerned about a similar influx of attention and capital into the Ethereum ecosystem, given its ongoing improvements in scalability and usability.

Furthermore, Lubin suggested that the prospect of the banking industry’s customers moving their assets into DeFi constructs could alarm many banks and financial institutions.

He stated, “The SEC probably doesn’t want to view a wave of creativity that will transform the landscape.”

The regulator is taking measures to maintain control and prevent innovation that could challenge the existing financial system.

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