Banking Elites Behind US Crypto Hostility? Ethereum Co-Founder Speaks Out

Ethereum co-founder Joseph Lubin has recently voiced concerns over the United States government’s increasingly hostile stance towards cryptocurrencies.

In an interview during FT Live’s Crypto and Digital Asset summit in London, Lubin suggested that the root cause of this hostility might go beyond individual politicians or political parties, and could be influenced by banking elites who feel threatened by the potential of decentralization.

TLDR

• Ethereum co-founder Joseph Lubin believes the US government’s hostility towards crypto goes beyond individual politicians and may be influenced by banking elites who feel threatened by decentralization.
• Lubin criticizes the SEC for stifling innovation and creating a climate of fear, uncertainty, and doubt in the crypto industry through enforcement actions rather than open discourse and clear rulemaking.
• ConsenSys, the company behind MetaMask wallet, has filed a lawsuit against the SEC to seek clarity on Ethereum’s regulatory status after receiving a Wells notice.
• The SEC’s actions coincide with the upcoming deadline for deciding on Ether spot ETFs, which Lubin suggests is a strategic move to justify denying the ETFs.
• The outcome of ConsenSys’s legal battle with the SEC could have far-reaching implications for the entire US technology industry, as it may set a precedent for regulating digital wallets and decentralized finance.

Lubin specifically criticized the U.S. Securities and Exchange Commission (SEC) for its approach to regulating the cryptocurrency industry.

He argued that the SEC’s enforcement actions, rather than open discourse and clear rulemaking, are creating a climate of fear, uncertainty, and doubt, which effectively stifles innovation and growth.

At FT Live’s summit, #Ethereum‘s Joseph Lubin accused the #SEC of harming financial innovation by using enforcement over clear rules, hinting at an unannounced reclassification of Ether as a security. #CryptoRegulation #SEC #Innovationhttps://t.co/mlctKOFSjP

— 1ATH.Studio (@1ATHStudio) May 10, 2024

The situation escalated when ConsenSys, the company behind the popular MetaMask wallet, received a Wells notice from the SEC.

In response, ConsenSys filed a preemptive lawsuit against the regulator, challenging its reported position that the buying and selling of ETH constitutes an illegal unregistered securities offering.

Lubin emphasized the significance of this legal action, as a victory for the SEC could potentially spell the end of the Ethereum blockchain in the United States.

Lubin also pointed out the inconsistencies in the regulatory landscape, noting that while the Commodity Futures Trading Commission (CFTC) had previously classified Ether as a commodity, the SEC now suggests it may be a security.

This lack of clarity has led to confusion and uncertainty within the industry.

Lubin highlighted the suspicious timing of the SEC’s actions against Ethereum, which coincide with the agency’s upcoming deadline to decide on Ether spot exchange-traded funds (ETFs).

He speculated that these enforcement actions might be a strategic move to justify denying the ETFs, as the SEC had previously allowed Bitcoin ETFs, which led to a significant influx of capital into the ecosystem.

The broader implications of ConsenSys’s legal battle with the SEC extend beyond Ethereum. Lubin condemned the SEC’s stance that digital wallets like Coinbase and MetaMask should be regulated as broker-dealers, calling it a “preposterous notion.”

He argued that such regulation could severely restrict technological innovation and user freedom in the United States.