Vitalik Buterin, a co-founder of Ethereum, the second largest cryptocurrency project by market cap, took a stance on the recent actions that the U.S. Securities and Exchange Commission (SEC) has taken in the field of enforcement against crypto. Buterin mentioned how projects like Solana were included in these legal actions and stated that the real competition was the “centralized world.”
Vitalik Buterin Opens up on SEC Crypto Enforcement Actions
Vitalik Buterin, a co-founder of Ethereum, has opened up on his thoughts about the recent crypto enforcement actions the U.S. Securities and Exchange Commission (SEC) is taking against exchanges and cryptocurrency projects. When asked about his thoughts on the issue by Matt Huang, co-founder of California-based crypto investment firm Paradigm, Buterin answered:
I feel bad that Solana and other projects are getting hit in this way. They don’t deserve it, and if ethereum ends up ‘winning’ through all other blockchains getting kicked off exchanges, that’s not an honorable way to win, and in the long term probably isn’t even a victory.
Furthermore, Buterin warned about the possible objectives behind these actions, stating that “the real competition is not other chains, it’s the rapidly expanding centralized world that is imposing itself on us as we speak,” wishing other crypto projects a “fair outcome” on this situation.
Ethereum, Solana, and Their Classification
Solana, Cardano, Polygon, BNB, and other cryptocurrency projects have been included in the current legal cases that the SEC is battling against Coinbase and Binance, two of the largest cryptocurrency exchanges in the market. SOL, the native token of Solana, a smart-contracts-enabled cryptocurrency project, has been labeled a security in these processes, endangering its permanence and listing in U.S.-based exchanges without prior registration.
However, the Solana Foundation, whose mission is to “help build the Solana protocol into the most censorship-resistant network in the world,” has questioned the validity of the SEC’s vision, stating it “disagrees with the characterization of SOL as a security.”
Ether, the native token of the Ethereum network, is also part of this security categorization debate. On a recent congressional hearing, SEC chairman Gary Gensler did not answer a direct question on whether ether represented a security in the eyes of the commission or not.
However, in his now infamous 2018 speech, former SEC official William Hinman detailed that based on his understanding, “current offers and sales of ether are not securities transactions.” On March 9, 2023, New York attorney general Letitia James filed a lawsuit against Kucoin, in which the prosecutor classified ether as a security.
According to JPMorgan analyst Nikolaos Panigirtzoglou, the unsealing of the Hinman docs, a group of internal memos and emails showing the discussions SEC officer had before this speech, boosts the possibility of ethereum being ruled a commodity, explaining that these might trigger a boom for decentralization.
What do you think about Vitalik Buterin’s stance on the SEC enforcement actions against crypto projects? Tell us in the comments section below.