Joseph Lubin ruled out the recognition of Ethereum as a security

The second largest cryptocurrency by capitalization will not be classified as a security in the United States after the transition to Proof-of-Stake. This opinion was expressed by the founder of ConsenSys and one of the creators of Ethereum, Joseph Lubin, in a conversation with Cointelegraph.

“I think this is just as likely and will have the same impact as Uber being outlawed. This would cause a huge outcry not only from the crypto community, but also from various politicians and certain regulatory bodies,” he explained.

In September 2022 head SEC Gary Gensler admitted that cryptocurrencies implying the possibility of staking can pass howey test, which is used to determine the status of a security. The statement came after the activation of The Merge update on the Ethereum mainnet.

Lubin said he has been in discussions with the SEC and the Commodity Futures Trading Commission for “many years.” About five years ago, regulators were “just trying to figure out what tokens are,” he added.

“Back then they thought that everyone [криптовалюты и токены] qualify as a security. We, I think, helped them better understand that many tokens are not securities, and then they left, and now Gary [Генслер] and the team think that almost everything is a security,” said Lubin.

However, the founder of ConsenSys emphasized that Ethereum remains “quite decentralized” and has “many use cases” that preclude it from being recognized as a security.

“There is no centralized set of promoters or developers specifically trying to boost the value of ETH and enrich investors. There is a judicial system in the United States, which, I think, will support the arguments that will be put forward in favor of the fact that this is not so, ”concluded Lubin.

In December 2020, the SEC filed a lawsuit against Ripple accusing the company of selling unregistered securities.

Fox Business later published a massive investigation into the case. The journalists came to the conclusion that the employees of the department behind the filing of the lawsuit could be affiliated with Ethereum.

A possible conflict of interest in the actions of former high-ranking officials of the Commission was also pointed out by the non-profit organization Empower Oversight.

Ripple’s lawyers throughout most of the process tried to obtain internal documents from the SEC – the text of a 2018 speech by former director of the regulator’s corporate finance department, William Hinman. Then he declaredthat, for various reasons, Bitcoin and Ethereum are not securities.

In late 2022, the Commission filed a motion to seal some of the documents in the Ripple case, including a draft of Hinman’s speech.

Recall that in February 2023, the Kraken crypto exchange settled a dispute with the SEC, which saw violations in the staking program.

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