Cryptocurrency entrepreneur Joseph Lubin believes ETH will not be classified as a security in the United States.
When asked whether ETH could be classified as a security in the U.S. after Ethereum transitioned to a PoS consensus model, Ethereum co-founder and founder of blockchain technology company ConsenSys said:
“I think it’s likely to happen and have the same effect as if Uber were illegal.
There will be outcry not only from the crypto community, but also from various politicians and certain regulators. “
In September, SEC Chairman Gary Gensler said that blockchain’s transition to PoS may have brought ETH under the regulator’s control.
According to Gensler, staking gives the “investing public” an expectation of “returns based on the efforts of others.”
Lubin said he has known about the discussions with the SEC and the Commodity Futures Trading Commission for “years.”
About five years ago, regulators were “just trying to figure out what a token is.”
“Back then they thought everything was a stock. We — I think — made it clear to them that a lot of tokens weren’t securities, and then they walked away, and now Gary and his team think almost everything is a security.”
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Lubin, however, believes that ETH continues to be “fully decentralized,” noting that “many use cases suggest it is not a security.”
“There is no centralized promoter or builder trying to add value to Ether and enrich investors. I think there is a court system in the US that supports the argument that ETH is not a security.”
Regulators appear to be focusing on another aspect of ethereum, Lubin said, noting a source in Washington, D.C., who said “most of the focus right now is on stablecoins.”
In a Twitter thread on Feb. 9, Coinbase founder and CEO Brian Armstrong said he had heard rumors that the SEC was considering banning retailers from staking cryptocurrencies.
“Staking is not a security,” he said, adding that if a staking ban passes, it will be difficult for the U.S. to innovate.
“Hopefully we can work together to create clear rules for the industry and come up with smart solutions that protect consumers while maintaining innovation.”
- SEC Declines to Comment on Whether Ethereum Is a Security
- FSMA Belgium Declares Bitcoin and ETH Not Securities
As reported by Cointelegraph