Feb 11, 2023
Joseph Lubin Confident ETH Not Classified as Security in US
Joseph Lubin, co-founder of Ethereum and founder of blockchain technology firm ConsenSys, is confident that Ether (ETH) will not be classified as a security by the United States. During an interview with Cointelegraph at the Web3 event Building Blocks 23 in Tel Aviv, Lubin expressed his belief that the Ethereum network is sufficiently decentralized and has many use cases that do not implicate it as a security.
In September, Securities and Exchange Commission Chairman Gary Gensler suggested that the blockchain’s transition to Proof-of-Stake (PoS) might have brought ETH under the regulators’ beat. Gensler believed staking coins gave “the investing public” anticipation of “profits based on the efforts of others.”
Lubin has been involved in discussions with the SEC and the Commodity Futures Trading Commission for several years. He noted that five years ago, regulators were trying to comprehend what tokens were, and believed that everything was a security. Lubin believes that he has helped them understand that many tokens are not securities.
Lubin believes that ETH is still sufficiently decentralized, and pointed to its many use cases that do not implicate it as a security. He said that there is no centralized set of promoters or builders that are specifically trying to raise the value of Ether and enrich investors.
Regulators appear to be more focused on stablecoins at the moment, according to Lubin. He said that people close to the action in Washington D.C. are talking about the issue and calling for action.
In response to rumors that the SEC was thinking to ban retail consumers from staking crypto, Coinbase founder and CEO Brian Armstrong said that staking is not a security and it would be a “terrible path for the U.S.” if a staking ban was passed. Armstrong expressed hope that the industry can work together to publish clear rules for the industry and come up with sensible solutions that protect consumers while preserving innovation.
Joseph Lubin’s belief that Ethereum won’t be classified as a security in the United States is a positive sign for the web3 space. The NFT craze has been one of the most talked-about topics in the crypto space in recent months, and the ability to sell NFTs without worrying about regulatory issues is a major factor in the success of the space.
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