• A former advisor to Ethereum has accused Gary Gensler of being deeply involved in the Ethereum world and covertly using Prometheum to designate ETH as a security amid ETF applications.
• Steven Nerayoff further alleged that Gensler and the Ethereum hierarchy, including Vitalik Buterin, have deep ties to China’s CCP and that the Chinese government owns two-thirds of ETH.

Gary Gensler has come under fire in recent weeks over the SEC’s laxity, misrepresentation of facts, bias and a raft of other allegations, both from the public and Congress. The latest to point a finger at Gensler is Steven Nerayoff, a former Ethereum advisor who claims the SEC chair is a Chinese pawn, along with Ethereum founder VItalik Buterin.

Nerayoff is a former advisor to the Ethereum Foundation. He played a critical role in turning around the fortunes of Ethereum in late 2014, advising Vitalik and the team on how to position it for future dominance. As such, his knowledge of the inner workings of Ethereum is unquestioned.

This makes his accusations all the more damning for Gensler, the SEC and Ethereum.

Nerayoff took to X to allege that Gensler is more involved in the Ethereum ecosystem than he has chosen to share. He pointed to the approval of Prometheum’s custody solution as the first step toward pronouncing ETH as a security.

This would deal a big blow to the Ethereum community as it would require all exchanges that support its trading to be securities platforms. That would effectively wipe out the second-largest crypto as most crypto exchanges, including Binance and Coinbase, aren’t cleared to offer securities.

The approval in focus was for Prometheum, a digital securities trading and custody platform founded in 2017. The firm claims to be the only “SEC-qualified custodian and special purpose broker-dealer for digital asset securities.” Last month, it received FINRA approval to clear and settle digital asset securities, which Nerayoff claims Gensler had a hand in.

Is Gensler a Chinese Pawn Working Against Ethereum?

According to the former Ethereum advisor, the approval of Prometheum to support ETH trading and custody, yet it’s a digital securities platform, indicates that Gensler intends to designate ETH as a security.

Nerayoff further revived longstanding fears of the involvement of the Chinese government in the Ethereum ecosystem. He claimed that the Prometheum approval “shows that Gensler’s actions are under heavy influence by the [Chinese Communist Party], prompting questions about the consequences of alternative actions.”

Allegations of Ethereum’s links to the CCP are not new. Just a week ago, a blockchain analyst alleged that the CCP controls 66.6% of the ETH supply, making it the largest whale in the entire ecosystem.

“They’ve clearly compromised the SEC and CFTC, with Prometheum being given the ONLY Special Purpose Dealer Broker license for Digital Assets,” the analyst claimed.

Nerayoff was among those who endorsed the exposé, and he now says that Vitalik and fellow co-founder Joe Lubin are Chinese pawns alongside Gensler. He stated:

Key figures within Ethereum are steering the crypto landscape towards centralized authority, aligning with Chinese interests. Their silence and efforts to classify ETH as a security challenge the welfare of global investors.

Meanwhile, ETH is trading at $2,643, losing a paltry 0.42% in the past day as the volume dipped 13% to hit $16.48 billion.

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