Steven Nerayoff, previously an advisor to Ethereum, has publicly accused Gary Gensler, the Chair of the US Securities and Exchange Commission (SEC), of having undisclosed ties with Ethereum, particularly in the context of the expected launch of an Ethereum Exchange-Traded Fund (ETF).
Nerayoff’s statements have reignited the “ETH Gate” conspiracy theory, suggesting deeper involvement of the SEC Chair with Ethereum. The theory alleges that Ethereum unfairly avoided regulatory scrutiny by the U.S. Securities and Exchange Commission, which has consistently maintained that ETH is not a security.
With growing speculation around an Ethereum ETF, it’s evident that the SEC, led by Gary Gensler, is more involved in ETH than it appears. Gensler’s indirect approval for @PrometheumInc to designate ETH as a security effectively endorses an ETF covertly.
This decision shows that… pic.twitter.com/i0TVEdLDfq
— Steven Nerayoff (@StevenNerayoff) February 12, 2024
According to Nerayoff, the SEC, under Gensler’s leadership, is significantly involved with Ethereum. This involvement is highlighted by the approval for Prometheum Inc., a securities marketplace, to categorize ETH as a security. This move is seen as an indirect endorsement of an ETF by the SEC.
The approval from the SEC and FINRA makes Prometheum the only US-registered crypto securities platform. This has sparked controversy and scrutiny from Republican lawmakers questioning the transparency of the SEC’s decision-making process.
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Nerayoff has previously mentioned that Prometheum’s classification of Ethereum as a security “extends beyond regulatory semantics.” He described it as a move by “entities with deep CCP ties,” aiming to “control the narrative and the crypto space.”
As such, Nerayoff’s claims also touch upon the influence of the Chinese Communist Party (CCP) on Ethereum’s regulatory landscape. He once again raised alarms about the potential centralization of Ethereum. He asserted that if Ethereum is classified as a security, it would be perceived as a centralized asset influenced by the CCP.
Nerayoff’s concerns about the CCP’s role in Ethereum are supported by on-chain researcher TruthLabs’ findings, which speculate that the CCP controls approximately 66.6% of the ETH supply. Such a level of control, if validated, would significantly question Ethereum’s decentralized framework.
The CCP has taken over Crypto by being Ethereum’s largest hidden whale, with an ownership estimation on my end of near 66.6% of the Eth supply today. They’ve clearly compromised the SEC, and CFTC, with Prometheum being given the ONLY Special Purpose Dealer Broker license for… pic.twitter.com/C5eCrGUH7d
— TruthLabs 🫡 (@BoringSleuth) February 8, 2024
Previously, Nerayoff himself was embroiled in legal issues, accused of extorting a Seattle-based cryptocurrency startup during his tenure as an advisor. Allegations suggested he threatened to “destroy” the company unless paid millions of dollars. However, after a lengthy legal process, these criminal extortion charges were dropped by a New York judge, concluding the saga and highlighting the challenging legal landscape faced by individuals in the cryptocurrency sector amidst regulatory scrutiny.
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