In a recent interview, Joseph Lubin, co-founder of Ethereum (ETH) and founder of ConsenSys, dismissed the notion that Ether ($ETH) should be classified as a security, comparing it to commodities like oil.
In an interview with CNBC’s Arjun Kharpal during Paris Blockchain Week 2023, Lubin expressed his confidence that Ethereum is not a security, stating, “Anyone can say anything, it doesn’t make it true.”
Lubin’s comments come after a lawsuit filed by the New York Attorney General (NYAG) Letitia James against Seychelles-based cryptocurrency exchange Kucoin. The lawsuit claims that Kucoin failed to register as a securities and commodities broker-dealer and misrepresented itself as an exchange. The NYAG’s office listed Ethereum among several tokens on Kucoin that the regulator considered securities, describing it as a “speculative asset.”
In response, Lubin said, “It’s unfortunate that that sort of side swipe was made, but I don’t think it’s all that relevant.” Ether, unlike Bitcoin, powers an ecosystem of applications enabling users to conduct trades, loans, or purchase nonfungible tokens. With a market capitalization of $212.8 billion, it is the world’s second-largest token.
The U.S. Securities and Exchange Commission (SEC) has also suggested that Ether might be considered a security due to its transition to a “proof of stake” verification system. This system allows blockchain validators to lock up some of their tokens in exchange for securing the network and earning interest-like yields.
Lubin, however, maintains that Ether should be regarded as a commodity, arguing, “People buy barrels of oil with the expectation of profit.” When questioned about the possibility of Ether being classified as a security, he said, “I don’t think there’s any point to speculate on something that is extremely unlikely.”
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