Ethereum
Ethereum and blockchain technologies are under threat from Washington regulators
The Texas “economic miracle” is a well-established fact and the latest data from Texas Labor Commission Confirms it: In the first quarter of this year, the state saw the largest increase in nonfarm employment across the country, posted record employment levels and recorded its 36th consecutive month of positive annual growth.
Texas has capitalized on this dynamic and become a decisive leader in so-called Web3 innovation. In other words, it is the decentralization of blockchain technologies and the token-based economy. Blockchain is the mechanism that records digital transactions between computers.
This is no coincidence: Texas lawmakers have intentionally crafted pro-crypto policies that have, in turn, attracted a strong ecosystem of developers and miners. And the state’s deregulated electricity market allows access to cheap energy supplemented by a healthy mix of renewable energy.
These are just a few of the reasons we moved our company, Consensys, from New York to North Texas last year. We were confident that Texas would be the ideal location for our core offerings, built on Ethereum – the second largest blockchain in the world – and powered by ether, the digital product behind it.
Specifically, we concluded that Texas’ unique chemistry of business-savvy leaders, encouragement of innovation, and a stable regulatory environment would enable Consensys to help guide the next phase of business development. ‘Internet. The features of this next phase – transparency, security and accessibility, all controlled by the user and not by a large technology company – are undeniably revolutionary. This is why companies around the world are already building software applications running on Ethereum. And why the world’s largest asset managers are working on asset tokenization using Ethereum.
Yet all this potential is under imminent attack from Washington’s unelected regulators. Without legal authority, the Securities and Exchange Commission is arbitrarily reclassifying ether from a commodity to a security in order to enforce the type of registration and other requirements that attach to securities (such as bonds , stocks and other investments) under its jurisdiction.
But ether is clearly and logically not a security. Repeatedly, the SEC itself has made this point, as has its sister agency. Commodity Futures Trading Commission – and our entire economic model was built in the context of this clear and prior regulatory consensus.
THE SEC Regulatory Escalation belies the fundamental principles of separation of powers, where it is up to Congress to legislate and assign jurisdiction over blockchains like Ethereum. Texas knows all too well the risks inherent in excessive federal regulation, and the SEC’s proposed power grab in this case is illegal, unwarranted and arbitrary. It also directly and materially impacts Texas by dismantling a growing sector that both supports high-skilled jobs in Texas and represents the cutting edge of technology, how we store our data, and the future of our interactions digital.
More broadly, if the SEC prevails, it will mean the end of the Ethereum blockchain in the United States by making ether functionally inaccessible and unusable. Software developers in Texas and across the country wanting to build applications interoperable with Ethereum would have to register as securities broker-dealers with the SEC itself, a draconian measure that would also ban all current software development in the states -United regarding Ethereum. like daily transactions in ether which are essential to on-chain transactions.
We hope that the State of Texas, accustomed to aggressively fighting federal regulatory excesses, will join us in stopping the SEC in its tracks. We recently took a major step forward by filing a lawsuit against the SEC, asking a federal court to order the SEC to end its illegal campaign.
We urge Texans who value innovation and economic independence to follow suit, support this unfortunate but all-too-necessary effort, and preserve the state’s hard-won leadership position at the forefront of Web3 innovation.
Joseph Lubin is co-founder of Ethereum and founder and CEO of Consensys.
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