Ethereum Co-Founder Talks SEC Investigation

For Ethereum co-founder Joseph Lubin, US regulators are evolving and therefore the SEC should not categorize Ether (ETH) as a security.

Lubin’s speeches come as the SEC fines Kraken BRL 158 million for offering a cryptocurrency revenue service and investigating cryptocurrency strike.

That is, there is concern that regulators are taking the same measure at the protocol level. After all, Ethereum also started offering returns after migrating to Proof-of-Stake.

However, the Ethereum co-founder argued that ETH is decentralized enough to be considered a commodity, i.e. pass the Howey test and not be penalized. Moving on, there are also other differences between the services mentioned above, such as where such revenue comes from.

It would be like banning Uber, Lubin says of potential Ethereum penalties

Joseph Lubin even compared Ethereum to Uber while speaking to Cointelegraph, stating that it would be unlikely to ban any of these services as it would attract a lot of opposition.

“There would be a huge outcry not only from the cryptocurrency community, but also from several politicians and certain regulators.”

Moving on, the Ethereum co-founder also notes that the US Securities and Exchange Commission (SEC) is evolving as it studies cryptocurrencies.

“Before they thought everything was a security (security)”Joseph Lubin told Cointelegraph. “We – I think – significantly helped them understand that a lot of tokens are not securities, so they left and now Gary [Gensler] and his team think almost everything is a security.”

Despite this, Gensler himself has already stated that Ethereum is a security. However, other regulators like Rostin Behnam, chairman of the CFTC, think the opposite, ultimately leaving ETH in a gray area and full of uncertainty for investors.

Finally, Lubin also pointed out that Ethereum development is decentralized enough for regulators to consider it.

In an attempt to change the subject, he also stated that the US is more concerned about stablecoins at the moment. That is, the case of whether or not Ethereum is a security should be a long time coming.

Dividends with cryptocurrencies

While the SEC fined Kraken this week, saying the exchange was not providing enough clarity to its investors, the situation with Ethereum is a bit different.

Despite paying “dividends” as well, it is clear how Ethereum generates this income. That is, investors are rewarded for creating new currency, the famous inflation. In the case of Kraken, and other companies, there is no clarity on the source of this income, as the SEC chairman points out.

As such, it is hard to believe that Ethereum is classified as a security for this reason. However, it is worth noting that the founders have raised a lot of money to carry out the project, which may complicate the situation for both Lubin and ETH holders.