Ethereum co-founder and crypto entrepreneur Joseph Lubin believes 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 event, Building Blocks 23.
Asked whether 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 likely, and it will have the same effect, as if Uber were made illegal.”
“There has been tremendous opposition from not only the crypto community but different politicians and certain regulators,” he said.
In September, Securities and Exchange Commission Chairman Gary Gensler suggested that blockchain’s transition to PoS might bring ETH under the purview of regulators.
Gensler believes that staking coins gives “public investment” the anticipation of “profits based on the efforts of others.”
Lubin said he has been involved in discussions with the SEC and the Commodity Futures Trading Commission “for years.”
He said about five years ago, regulators were “just trying to wrap their heads around tokens.”
“They thought it was all about security. We – I think – helped them understand a lot of tokens are not securities, and then they left and Gary and the team now think about almost everything about security.
However, Lubin believes that ETH continues to be “quite decentralized” and shows “a lot of use cases that are not related to security.”
“There is no centralized set of promoters or builders who specifically try to raise the value of Ether and enrich investors,” he added.
“There is a court system in the United States that I think would support the argument that would otherwise be made.”
Lubin said that the regulator seems to be more focused on other aspects of Ethereum at the moment, noting that those who know close to the action in Washington DC say “mostly focused on stablecoins now.”
“Everybody talks about it, it’s scary. Call it to make it happen.
In a February 9 Twitter thread, Coinbase founder and CEO Brian Armstrong responded to “rumors” that the SEC is considering banning retail consumers from crypto staking.
related: CFTC chief looks to new Congress for action on crypto regulation
“Staking is not a security,” he said, adding that it would be a “terrible road for the US” if the ban on staking is implemented citing “very important innovation in crypto.”
“We hope that we can work together to issue clear rules for the industry, and provide sensible solutions that protect consumers while preserving innovation,” Armstrong said.