Ethereum co-founder Joseph Lubin has hailed SEC chairman Gary Gensler as a “shining knight of decentralization.”
Ethereum co-founder Joseph Rubin
Speaking at ETHDenver (concludes March 5), Lubin spoke candidly about recent regulatory enforcement actions, pointing to Gensler as a catalyst for decentralization. So, in the case of the SEC’s recent move to Kraken, Lubin said the exchange’s staking product is centralized — and therefore, it should be considered a security.
He added that the narrative of the product’s decentralization has fallen out of favor as Kraken struggles to generate returns paid to stakers.
“If you advertise that you are a very decentralized thing in a way that it looks like people are going to make money from your efforts, that statement will make your product a security.”
The Howey test determines whether a contract, program, or transaction meets the definition of a security under the securities laws. The point of this test is to determine whether an investor would put money into a common business with the expectation of profiting from the efforts of others.
Lubin said Gensler and the SEC “have done a great job of promoting fully self-decentralized projects in our ecosystem.” He emphasized this by calling Gensler a “shining knight of decentralization.”
On Feb. 9, Kraken settled with the SEC and paid a $30 million fine for allegedly operating an unregistered securities offering through its pledge program.
The issue has spooked staking service providers; however, Coinbase said it is ready to defend its staking program in court if necessary.
not everyone agrees
A history of unfair law enforcement practices and regulatory issues has recently drawn the attention of the crypto community. For example, Ripple CEO Brad Garlinghouse claims that only registration is required to achieve compliance. However, he pointed out that such a registration process does not exist, and it is not clear what a registered token is.
“Chairman Gensler went on to say that companies just need to come and register, but the reality is that there is no infrastructure for trading “registered tokens,” nor any clarity as to what those tokens are.”
SEC Commissioner Pierce echoed Garlinghouse’s sentiments, saying she wasn’t sure if pledged products could be registered. Among them, how the pledge program is supervised, including whether the pledge program is registered, or whether individual tokens in the program are registered, etc., there are still some unresolved issues.
Elsewhere, Gensler recently suggested that PoS projects should be regulated as securities, dealing a further blow to Ethereum and all proof-of-stake (PoS) blockchains.
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mango
According to Cryptoslate
