- Joe Lubin’s Consensys challenges the regulatory overreach on Ethereum’s activities by filing a lawsuit against the SEC.
- With a recent price boost, Ethereum maintains a significant market presence despite the regulatory challenges.
The co-founder of Ethereum and Consensys, Joe Lubin, is involved in a legal battle with the Securities and Exchange Commission (SEC), as reported by Wired. Lubin charges the SEC with trying to illegally extend its regulatory control over the internet’s future, in addition to specifically targeting Ethereum.
Joe Lubin cofounded Ethereum. Now his company is suing the Securities and Exchange Commission, and he says the future of the internet is at stake. https://t.co/A80VAqeRT8
— WIRED (@WIRED) May 6, 2024
The History of Ethereum and Consensys Formation
The second-largest cryptocurrency in the world, ETH, is currently housed on Ethereum, which was founded in part in 2015 in Lubin. Later in the year, he founded Consensys with the goal of accelerating Ethereum’s development and wider adoption.
The company is responsible for producing important software products like MetaMask, which is an essential tool in the Ethereum ecosystem.
Consensys received a Wells Notice in April, indicating impending legal issues mostly centered around MetaMask, which escalated the conflict with the SEC, in line with what ETHNews previously disclosed
This software, which is essential to Ethereum’s user interface, appears to have gotten Consensys into trouble with the SEC.
The agency claims that MetaMask’s features turn the company into an unregistered securities broker and specifically target its staking and token trading functions.
Consensys Retaliates with a Lawsuit
In response, Consensys launched its own legal offensive on April 25, filing a lawsuit against the SEC. The lawsuit contends that the SEC is unlawfully overstepping its bounds with Ethereum, asserting that ETH does not possess the characteristics of a security, and thus should fall outside the SEC’s purview.
The lawsuit further highlights the regulatory ambiguity surrounding Ethereum, noting that an SEC director previously classified ETH as a commodity, a stance supported by the Commodity Futures Trading Commission. The foundation of Consensys’ activities and aspirations has been this classification.
Ethereum’s Consequences and Upcoming Forecasts
The reclassification of Ethereum as a security by the SEC might have disastrous effects for Ethereum users nationwide by raising regulatory scrutiny and possibly inhibiting innovation and participation.
The larger crypto community is nevertheless keeping a close eye on things in the hopes that Consensys’ appeal will slow down the SEC’s aggressive regulation tactics.
Ethereum’s market position is still robust while the legal dispute plays out. The price of ETH is currently at roughly $3,198.12, up 1.90% from the previous day, according to CoinMarketCap. The koin has increased by 1% during the last week.