Ethereum co-founder and crypto entrepreneur Joseph Lubin is confident that Ether (ETH) will not be classified as a security in the United States.
Cointelegraph spoke with Lubin, co-founder of Ethereum and founder of blockchain technology company ConsenSys, in Tel Aviv at the Web3 Building Blocks 23 event.
When asked if ETH could be classified as a security in the US after Ethereum’s transition to a proof-of-stake (PoS) consensus model, Lubin said:
“I think it’s just as likely and would have the same impact as if Uber were illegal.”
“There would be a tremendous outcry not only from the crypto community but also from different politicians and certain regulators,” he added.
In September, Securities and Exchange Commission Chairman Gary Gensler suggested that the transition from blockchain to PoS could have brought ETH under the control of regulators.
Gensler believed that staking coins gave the “investing public” an anticipation of “profits based on the efforts of others.”
Lubin said he was aware of discussions with the SEC and the Commodity Futures Trading Commission “for many years.”
He said that about five years ago, regulators were “just trying to understand what tokens were.”
“They thought at that time that everything was a security. We, I think, helped them significantly understand that a lot of tokens aren’t securities, and then they left and Gary and the team now think almost everything is security.”
However, Lubin believes that ETH remains “sufficiently decentralized” and noted its “many use cases that do not involve it as a security.”
“There is no centralized set of developers or builders that is specifically trying to increase the value of Ether and make investors rich,” he added.
“There is a judicial system in the United States of America that I think would support the arguments that would be made that it is not.”
Lubin said that regulators appear to be more focused on another aspect of Ethereum at the moment, noting that people he knows close to the action in Washington DC say that “most of the focus is on stablecoins right now.”
“Everyone is talking about it, freaking out. Calling for things to be done.”
In a February 9 Twitter thread, Coinbase founder and CEO Brian Armstrong responded to “rumors” that the SEC was thinking of banning retail consumers from gambling on cryptocurrency.
Related: CFTC Chief Hopes New Congress Will Act On Crypto Regulation
“Staking is not a security,” he said, adding that it would be a “terrible path for the US.” if a staking ban were to pass, noting that it was “a really important innovation in crypto.”
“Hopefully we can work together to publish clear rules for the industry and find sensible solutions that protect consumers while preserving innovation,” Armstrong said.
