Ethereum Co-Founder Denies that ETH is a Security

As the U.S. Security and Exchange Commission continues to tighten its grip on crypto, Ethereum’s co-founder Joseph Lubin is positive that the coin will proceed as it is. In spite of the token’s switch from the Proof-of-Work algorithm to the Proof-of-Stake one.

“I think it's as likely, and would have the same impact, as if Uber was made illegal,” he noted, adding “There would be a tremendous outcry from not just the crypto community but different politicians and certain regulators.”

Lubin claims that he is used to detailed talks with the SEC, which five years ago did not even understand what tokens were. 

“They thought back then that everything was a security. We — I think — helped them significantly understand that lots of tokens are not securities, and then they went away and Gary and team now think almost everything's a security,” he said, referring to the current Chairman of SEC Gary Gensler as opposed to his predecessor Jay Clayton.

In 2018, the SEC under Jay Clayton did not class ETH as a security. 

Lubin is also positive that despite the PoW-to-PoS switch, ETH is still “sufficiently decentralized” and emphasized that it has “many use cases that don’t implicate it as a security.”

“There is no centralized set of promoters or builders that is specifically trying to raise the value of Ether and enrich investors,” he said. “There's a court system in the United States of America that I think would be supportive of arguments that would be made that it is not.”

Previously, The Coinomist reported about the Ethereum Shanghai upgrade.