Ethereum Co-Founder Joseph Lubin Confident ETH Will Not be Classified as a Security2 min read
Joseph Lubin, Ethereum co-founder and founder of blockchain technology company ConsenSys, expressed his assurance that Ether (ETH) will not be categorized as a security by the United States.
During an interview with Cointelegraph at the Web3 event, Building Blocks 23 in Tel Aviv, Lubin was asked about the potential classification of ETH as a security in light of Ethereum’s shift to a proof-of-stake (PoS) consensus model. In response, he stated:
“I think it’s as likely, and would have the same impact, as if Uber was made illegal.”
Lubin further commented that any potential classification of ETH as a security would elicit a strong reaction not only from the cryptocurrency community, but also from politicians and certain regulators.
In September, the Chairman of the Securities and Exchange Commission, Gary Gensler, hinted that Ethereum’s transition to a proof-of-stake consensus model could bring ETH under the purview of regulators.
Gensler believed that staking coins, such as ETH, offer the investing public the potential for profits based on the efforts of others.
Lubin revealed that he has been a part of discussions with the SEC and the Commodity Futures Trading Commission for many years.
Lubin mentioned that several years ago, regulators were grappling with a basic understanding of what tokens were.
“They thought back then that everything was a security. We — I think — helped them significantly understand lots of tokens are not securities, and then they went away and Gary and team now think almost everything’s a security.”
Lubin remains confident that ETH is still “sufficiently decentralized” and that its wide range of uses and applications, which do not implicate it as a security, will be recognized by regulators.
He emphasized that there is no central entity promoting or working to increase the value of ETH with the intention of enriching investors.
“There’s a court system in the United States of America that I think would be supportive of arguments that would be made that it is not.”
According to Joseph Lubin, the regulators seem to have shifted their focus from Ether (ETH) to stablecoins. In a recent interview, Lubin mentioned that individuals he is closely associated with in Washington D.C. have reported that the regulatory focus is now centered on stablecoins.
“Everybody’s talking about it, freaking out. Calling for things to be done.”
In a recent Twitter post, Brian Armstrong, the founder and CEO of Coinbase, addressed rumors that the SEC (Securities and Exchange Commission) may consider banning retail consumers from participating in staking activities in the crypto industry.
Armstrong emphasized that staking is not a security, and he views the potential ban as a negative move for the US.
He expressed hope for a collaboration between the industry and the regulators to create clear guidelines that can balance consumer protection and the preservation of innovation in the space.