Feb 11, 2023
Lubin Confident Ethereum (ETH) Won’t Be Classified as Security in US
Joseph Lubin, Ethereum co-founder and founder of blockchain tech firm ConsenSys, is confident that Ether (ETH) won’t be classified as a security in the United States. Cointelegraph had the chance to talk to Lubin at the Web3 event, Building Blocks 23, in Tel Aviv.
When asked about the possibility of ETH being classified as a security after Ethereum’s transition to a proof-of-stake (PoS) consensus model, Lubin said: “I think it’s as likely, and would have the same impact, as if Uber was made illegal.”
He added, “There would be a tremendous outcry from not just the crypto community but different politicians and certain regulators.”
In September, Securities and Exchange Commission Chairman Gary Gensler suggested that the blockchain’s transition to 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 said he was privy to discussions with the SEC and the Commodity Futures Trading Commission “for many years” and noted that regulators were “just trying to wrap their heads around what tokens were” around five years ago. He believes that he and the crypto community were able to help them understand that not all tokens are securities.
Lubin also believes that ETH continues to be “sufficiently decentralized” and pointed to its “many use cases that don’t implicate it as a security.” He added, “There is no centralized set of promoters or builders that is specifically trying to raise the value of Ether and enrich investors.”
He said that he believes that the U.S. court system would be supportive of arguments that ETH is not a security.
Right now, Lubin said that regulators appear to be more focused on stablecoins. Coinbase founder and CEO Brian Armstrong responded to “rumors” that the SEC was thinking to ban retail consumers from staking crypto in a Feb. 9 Twitter thread. Armstrong said that staking is not a security and that it would be a “terrible path for the U.S.” if a staking ban was passed.
Lubin believes that the crypto community should work together to come up with sensible solutions that protect consumers while preserving innovation.
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