Feb 11, 2023
Lubin Confident ETH Not Classified as U.S. Security
Joseph Lubin, the co-founder of Ethereum and the founder of blockchain tech firm ConsenSys, is confident that Ether (ETH) will not be classified as a security by the United States. At the Web3 event, Building Blocks 23, in Tel Aviv, Lubin spoke to Cointelegraph and shared his insights.
Lubin was asked if ETH could be classified as a security after Ethereum’s transition to a proof-of-stake (PoS) consensus model. He responded that it was as likely as Uber being made illegal. He added that there would be a great outcry from not only the crypto community but also from politicians and certain regulators.
In September, the Securities and Exchange Commission’s Chairman Gary Gensler suggested that the blockchain’s transition to PoS might have made ETH a security. He believed that staking coins gave investors the anticipation of profits from the efforts of others.
Lubin said he was part of discussions with the SEC and the Commodity Futures Trading Commission for many years. He added that five years ago, the regulators were trying to understand what tokens were and thought that everything was a security. Lubin believes that he and his team helped the regulators to understand that not all tokens are securities.
Lubin is of the opinion that ETH is sufficiently decentralized and has many use cases that do not make it a security. He said that there is no centralized set of promoters or builders that specifically try to raise its value and enrich the investors. He also believes that the court system in the USA would be supportive of arguments that ETH is not a security.
At the moment, Lubin said that the regulators seem to be more focused on stablecoins. Brian Armstrong, the founder and CEO of Coinbase, also responded to rumors that the SEC was thinking of banning retail consumers from staking crypto. Armstrong said that staking was not a security and added that it would be a terrible path for the USA if a staking ban was passed. He called for clear rules for the industry that protect consumers and preserve innovation.
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