Ethereum co-founder Joseph Rubin launched a scathing critique of the Securities and Exchange Commission (SEC) on May 9, claiming that regulators are intentionally blocking innovation and preventing Ethereum from transforming the banking industry. He accused them of hindering their potential.
Speaking at FT Live's Crypto and Digital Assets Summit in London, Rubin said that instead of fostering open discussion and providing clear regulatory guidelines, the SEC has opted for strategic enforcement actions and It criticized the SEC's approach, arguing that it creates uncertainty for the industry.
“The SEC probably doesn't want a wave of game-changing innovation,” he said.
Joseph Rubin on why the SEC “hinders innovation.”
Mr. Rubin's remarks came in the wake of ConsenSys' decision to sue the SEC after receiving Wells' notice from regulators. Rubin said the SEC's actions, such as reclassifying Ether as a security without transparent communication, are aimed at instilling fear and suspicion and could potentially drive crypto companies offshore. He claimed that there was.
“The SEC appears to have reclassified Ether as a security without telling anyone,” Rubin said. “Rather than open discussion and clear rulemaking, they are seeking a series of strategic enforcement actions.”
Mr. Rubin's criticism centers on suspicions about the SEC's motives, particularly its recent enforcement action against Ethereum. Rubin indicated that the impending decision to approve an Ethereum spot exchange-traded fund (ETF) is raising concerns about the potential influx of capital into the Ethereum ecosystem, leading to increased SEC oversight.
🗣️ Ethereum developer ConsenSys, run by Joe Rubin, has filed a lawsuit against the SEC over “excessive regulation” of the Ethereum blockchain.#cryptonewshttps://t.co/1MsgbSROXn
— Cryptonews.com (@cryptonews) April 25, 2024
“We believe there is a series of activities in place to allow them to say that their actions were not capricious when it is highly likely that they will reject the Ethereum Spot ETF.” explained the co-founder.
In Rubin's view, the SEC's reluctance to embrace Ethereum's advances in scalability and ease of use stems from a fear that decentralized finance (DeFi) could have a transformative impact on the banking industry and a desire to maintain the status quo. It is said that it comes from the desire.
“I think they're concerned about a lot of attention and capital flowing into our ecosystem, given that the ecosystem has improved so much in terms of scalability and ease of use.” he added.
Rubin further argued that the SEC's concerns about innovation reflect a broader reluctance to adapt to emerging technologies and could hinder the growth of the crypto sector.
Additionally, Rubin warned against the SEC's attempts to classify platforms such as Coinbase and MetaMask's wallets as broker-dealers, saying such actions would set a dangerous precedent and stifle innovation across the technology sector. warned that it might.
“We have conflicting opinions on whether MetaMask should be registered as a broker-dealer,” he said. “I would be horrified if MetaMask users had to register their wallets as broker-dealers.”
SEC likely to reject spot ETH EFT
The SEC recently decided to postpone its ruling on the proposed Invesco Galaxy Spot Ethereum Exchange Traded Fund (ETF). The new decision deadline is July 5, 2024. The SEC stated that additional time is needed to thoroughly consider the proposed rule changes and related issues.
Similarly, Franklin Templeton's Spot Ethereum ETF application has faced significant delays, with the SEC pushing back its decision deadline until June 11, 2024.
Several other issuers have submitted applications for Ethereum ETFs, including BlackRock, 21Shares with Ark, Fidelity, Grayscale, VanEck, Hashdex, and Franklin Templeton, increasing market expectations.
Market analysts initially speculated that the SEC would reach a final decision on the Spot Ethereum ETF application in May, coinciding with filing deadlines for various asset managers.
However, recent delays announced by the SEC have dampened those hopes. Bloomberg Intelligence analyst James Seifert expressed skepticism, suggesting that the current Ethereum ETF application could be rejected, potentially changing the landscape of Ethereum investment options in the U.S. .
