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Ethereum developer firm Consensys managed by Joe Lubin has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) over its “overzealous regulation” around the Ethereum blockchain.
In an announcement on social media platform X, Lubin said, Consensys has taken an important step towards “preserving access to ether and by extension the Ethereum blockchain in the U.S. We are suing the SEC and fighting back against its overzealous regulatory overreach.”
Today, Consensys took an important step towards preserving access to ether and by extension the Ethereum blockchain in the U.S. We are suing the SEC and fighting back against its overzealous regulatory overreach. You can find more of my thoughts here: https://t.co/VmvOsrCxjw… https://t.co/5IubZo69FW
— Joseph Lubin (@ethereumJoseph) April 25, 2024
SEC’s Reckless Approach Brings Chaos
In a blog post, the firm said, the SEC’s reckless approach is bringing chaos to developers, market participants, institutions, and nations who are building or already managing critical systems running on Ethereum, the world’s largest platform for decentralized applications.
The firm went on to add that the SEC only has jurisdiction over securities and up until recently has declared that ether is not and should not be treated as a security.
Consensys stressed that the SEC should not be allowed to arbitrarily expand its jurisdiction to include regulating the future of the Internet — adding the SEC has no authority—nor should it—to regulate the technological evolution of the Internet or any basic technology for that matter.
“Ether is the native token of the Ethereum blockchain. It can be traded as a commodity (like oil), but it is also essential to the technological development of applications built on Ethereum – including applications that have clear, non-financial utility for vital sectors like healthcare, energy, transport, media, agriculture, and beyond. The SEC’s approach would make it impossible for developers to innovate and build, because it would classify non-financial platforms as financial applications thus requiring the SEC’s oversight and approval.” — Consensys.
Coinbase Lawsuit Against SEC
This latest lawsuit by Consensys mirrors a recent Coinbase filing. In March,it emerged that Coinbase had filed a lawsuit against the SEC, seeking a court directive for the regulatory authority to establish clear guidelines for the cryptocurrency sector.
In the lawsuit detailed in their March 11 court submission, Coinbase challenged the SEC’s lack of formal rulemaking for the crypto sector, asserting that the agency’s actions hindered the industry’s development and clarity.
SEC’s Absence of Digital Asset Rulemaking
The filing criticized the SEC for its passive stance on crypto regulation, arguing that the absence of specific rules has left the sector navigating a regulatory grey area.
Most recently, SEC Commissioners, Hester Peirce and Mark Uyeda, have publicly criticized the agency’s unclear cryptocurrency enforcement policies following a recent settlement with ShapeShift.