Steven Nerayoff, a former advisor to Ethereum, has publicly voiced concerns regarding the Chinese Communist Party’s (CCP) alleged dominance over the ETH blockchain. His comments, made on X (formerly Twitter), echo the investigative findings of TruthLabs, an on-chain sleuth.

According to TruthLabs, the CCP is imagined to regulate roughly 66.6% of ETH supply. This claim, if accurate, presents significant implications for the decentralization, security, and regulatory standing of Ethereum.

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

Nerayoff’s statements bring to light the potential deep-seated vulnerabilities contained in the ETH ecosystem. The CCP’s stake in Ethereum jeopardizes the whole crypto world. It’s inevitable. Ethereum has vulnerabilities—that’s a fact. The SEC and other entities are compromised. We are going to’t ignore this; we must confront the corruption, hold key figures accountable, and keep advancing this consistently evolving industry,” Nerayoff stated, underlining the urgency of addressing these issues head-on.

A focal point of those allegations is Prometheum, a corporation that recently received a Special Purpose Dealer Broker (SPDB) license from the US Securities and Exchange Commission (SEC), marking a controversial step towards potentially classifying Ether as a security. Nerayoff’s critique extends to this development, emphasizing the implications of such a classification.

“Prometheum’s declaration of Ethereum as a security extends beyond regulatory semantics; it’s a move by entities with deep CCP ties, aiming to administer the narrative and the crypto space,” he remarked, highlighting the strategic influence exerted by the CCP through entities like Wanxiang, which is deeply involved with Prometheum.

In his comments, Nerayoff also referenced TruthLabs findings regarding the SEC filings that underscore the pivotal role of Wanxiang throughout the operation and development of the Prometheum Network.

“The company (Prometheum) uses Wanxiang (CCP) as their SOLE project developer and relies on Wanxiang’s ability to create and maintain a successful platform. The dearth of the services of Wanxiang could have a material opposed effect on the pliability of the Company to Develop, Operate, or maintain the Prometheum Network,” TruthLabs quoted, spotlighting the ties with China.

Is Ethereum Really Infiltrated By China’s CCP?

TruthLabs has been on the forefront of uncovering these unsettling dynamics, alleging that the CCP’s influence over Ethereum and entities like Prometheum could compromise the privacy and security of Americans. The researcher’s evaluation suggests that the CCP’s involvement enables direct access to sensitive information of US consumers, a claim that amplifies the choice for scrutiny and accountability contained in the crypto industry and regulatory bodies.

Tune in at 1:10 and tell me @prometheuminc is just not wanting to sell you their Wanxiang, deep CCP tied, Crypto. Why is Gary Gensler giving this company access to our markets, and to American consumers? How did this CCP front company get the one approval and US corporations didn’t? Now… https://t.co/0FcfqHvv3i

— TruthLabs 🫡 (@BoringSleuth) February 9, 2024

Moreover, Nerayoff’s direct challenge to outstanding Ethereum figures, including Vitalik Buterin and Joseph Lubin, underscores the gravity of the situation. “It’s undeniable now. Your day of reckoning approaches… Vitalik Buterin, Joseph Lubin, Ethereum Foundation,” he warned, signaling the need for a concerted effort to take care of and mitigate the alleged corruption and external influence that threaten the ethos and integrity of the Ethereum network.

As Bitcoinist reported, Nerayoff is currently preparing a fraud lawsuit with the help of TruthLabs against the Ethereum Foundation, Buterin and Lubin. It just isn’t yet known when the lawsuit will be filed in a US court.

Over the past few months, Nerayoff has made quite just a few serious accusations against the Ethereum founders and submitted an old audio recording as evidence. Neither the Ethereum Foundation nor Buterin or Lubin have yet commented on any allegations, something Nerayoff and TruthLabs interpret as an admittance of guilt.

At press time, ETH traded at $2,454.

Featured image created with DALL·E, chart from TradingView.com