Ethereum Co-Founder Joseph Lubin Says The SEC Has Stealth-Classified ETH As A Security

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Updated: 10 May 2024

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Joseph Lubin, the CEO of Metamask developer ConsenSys and a co-founder of Ethereum, said the Securities and Exchange Commission (SEC) has classified ETH as a security by stealth.

“The SEC appears to have reclassified Ether as a security without telling anybody that that’s the case,” Lubin said, speaking at an FT Live Crypto and Digital Asset summit in London. “They are going about a strategic series of enforcement actions rather than open discourse and clear rulemaking.”

Joseph Lubin Says The SEC Aims To Create FUD For The Crypto Industry

In April, after ConsenSys received a Wells Notice from the SEC, it went on the offensive and sued the regulator for its “unlawful power grab” with regards to possibly classifying Ethereum as a security. Through this lawsuit, the firm aims to gain legal clarity from US courts regarding ETH’s security status, Lubin said.

This comes after the Commodity Futures Trading Commission (CFTC) had previously classified Ethereum as a commodity.

The regulator’s enforcement actions are meant to create fear, uncertainty and doubt for the crypto industry, according to Lubin. Speaking specifically about ConsenSys, he said that the SEC’s actions are “an attempt to paralyze” and force the Metamask developer offshore.

"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 @FT https://t.co/9yMZT3cIlb

— Consensys (@Consensys) May 7, 2024

Joseph Lubin Says The SEC, Banks Scared Of Asset Shift To DeFi Sector

Lubin said the possibility that customers in the banking industry could move assets into the decentralized finance sector scares traditional finance institutions and regulators.

“I think they’re concerned that so much attention will flow to our ecosystem,” Lubin said of the SEC. “The SEC probably doesn’t want to see a wave of innovation that will really transform the [financial] landscape.”