Vitalik Buterin, one of the founders of Ethereum, expressed his dissatisfaction with the actions of the U.S. Securities and Exchange Commission (SEC) against cryptocurrency exchanges and projects. When asked by Matt Huang, the founder of Paradigm, a California-based cryptocurrency investment firm, about his opinion on this matter, Buterin replied:

“I feel sorry for Solana and other projects that are being targeted. They don’t deserve this, and if Ethereum ‘wins’ by kicking out all other blockchains from exchanges, that’s not a fair way to win, and in the long term, it may not even be a victory.”

Furthermore, Buterin warned about the possible motives behind these actions, pointing out that “the real competition is not between other blockchains, but the growing centralized world that is imposing itself on us right now,” and he wished for fair outcomes for other cryptocurrency projects in this situation.

Projects like Solana, Cardano, Matrix, BNB, and others have been included in the ongoing legal suits filed by the SEC against Coinbase and Binance, two of the largest cryptocurrency exchanges in the market. The currency SOL, the native currency of the Solana project that enables smart contracts, has been classified as a security in these proceedings, threatening its continuity and listing on U.S.-regulated exchanges without prior registration.

However, Solana Foundation, which aims to “help build the Solana protocol to become the world’s most censorship-resistant network,” has raised doubts about the SEC’s vision, affirming that they “disagree with the classification of SOL as a security.”

Ether, the native currency of the Ethereum network, also sparks controversy regarding its classification as a security. In a recent congressional hearing, Gary Gensler, the chairman of the U.S. Securities and Exchange Commission, did not provide a direct answer on whether Ether is considered a security by the agency.

However, in his famous speech in 2018, William Hinman, a former SEC official, mentioned that based on his understanding, “the current offers and sales of Ether are not securities transactions.” On March 9, 2023, New York Attorney General Letitia James filed a lawsuit against Coinbase, classifying Ether as a security.

According to J.P. Morgan analyst Nikolaos Panigirtzoglou, the disclosure of Hinman’s memos, which are a set of internal notes and emails revealing discussions held by SEC staff prior to that speech, increases the likelihood of Ether being classified as a commodity. He points out that this could lead to an open-enabling boom.