Speaking at the FT Live Crypto and Digital Assets Summit in London, Ethereum co-founder Joseph Lubin said that the SEC appears to have classified Ethereum as a security, emphasizing that the regulator "deliberately" blocked the approval of an Ethereum spot ETF and did not want Ethereum to change the banking landscape.

Lubin elaborated on Consensys' decision to sue the regulator after receiving a Wells Notice from the SEC.

He explained: "The SEC appears to have reclassified Ethereum as a security without telling anyone that this was the case. They are taking a series of strategic enforcement actions instead of open discussion and clear rulemaking."

(Source: CoinTelegraph)

As the CEO of MetaMask wallet developer Consensys, Lubin pointed out that the enforcement actions are aimed at creating fear, uncertainty and doubt in the cryptocurrency industry, "trying to paralyze" and force the company to go offshore.

Lubin said that given that the Commodity Futures Trading Commission had previously classified Ethereum, the company's countermeasures against the SEC are intended to give the US courts a clearer message.

He also emphasized that the SEC's upcoming decision on the approval of an Ethereum spot ETF as a driving force for the regulator to re-take enforcement actions against Ethereum.

"We believe that the purpose of the flurry of activity is to allow them to demonstrate that even if they reject an Ethereum spot ETF, their behavior is not capricious," Lubin continued.

He further mentioned that the SEC also noticed how much capital flowed into the ecosystem after the Bitcoin spot ETF was approved.

"I think they are concerned that so much attention and capital will flow to our ecosystem because our ecosystem is making great progress in scalability and usability."

He also speculated that the prospect of banking customers using decentralized finance (DeFi) structures to transfer assets into digital form may scare many banks and other financial institutions.

The aggressive action against the SEC may also have broad implications for the cryptocurrency and technology landscape in the United States.

Lubin emphasized that the SEC's claim that Coinbase and MetaMask wallets acted as broker-dealers is a dangerous precedent.

He added that the idea of ​​a piece of software acting as a broker-dealer is a “ridiculous idea.”

“We disagree on whether MetaMask should be registered as a broker-dealer, and it would be chilling if every MetaMask user had to register their wallet as a broker-dealer,” he continued.

Lubin concluded that the entire U.S. tech industry could be affected by the SEC’s actions.