Ethereum Co-Founder Claims ETH is not a Security
The co-founder of the Ethereum foundation, Joseph Lubin, was involved in giving talks during the Collision Tech conference based in New Orleans Yesterday. Therefore, the event took place in the center of the various reports that the federal regulators were probing ETH to make a determination as to whether it should be classified as a security. Therefore, Lubin then reposted that the foundation was not concerned by the discussions which happened.
The Street made the report on May 1
“We spent a tremendous amount of time with lawyers in the U.S. and in other countries, and are extremely comfortable that it is not a security; it never was a security… many regulators that matter understands what Ethereum is.”
Additionally, the wall street journal reported yesterday that ETH was in a regulation “gray zone” and cited the various sources which were familiar with the matter. The WSJ sources, however, raised a concern in relation to the 2014 distribution, this was when the organization raised close to 31,000 BTC which is worth $18.3 million which was in one of the ICOs.
These funds were then used in the development of the Ethereum platform. However, some of the regulators said that the investors were involved in the buying of the crypto anticipating that it would increase in value and this would then lead to a profit based on the other people’s efforts.
This would then result in an argument due to the investment which would then count as a security based on the 70-year old Howey Test. This, therefore, means that the foundation was expected highly to make registrations for the sale of the US Securities and Exchange Commission (SEC) in 2014.
Lubin then yesterday countered this and stressed that ETH would fail the test due to the fact that the various investors shared a stake in the enterprise:
“[With] all these different actors providing their resources to run the platform, you need to pay them for [doing so]… This is a way of accessing a shared comput[ing] resource.”
Therefore, Gary Gensler mentioned the argument that ETH was sufficiently established to disqualify it from the classification of the securities. Therefore, he argues that the coin has now been mined which may help the Ethereum case.