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Ethereum Co-Founder Thinks SEC will See Crypto Like the Internet

Published September 14, 2023 12:47 PM
Teuta Franjkovic
Published September 14, 2023 12:47 PM
Key Takeaways
  • Joseph Lubin emphasized U.S. regulators’ role in aligning decentralized protocols with national principles.
  • The SEC contended that most crypto tokens are securities, leading to legal battles with crypto companies over registration.
  • Lubin said he hopes that, as with past technologies, reason will prevail in the crypto industry’s regulatory landscape.

Joseph Lubin, the co-founder of Ethereum, predicte d that “clear heads will prevail” as the U.S. Securities and Exchange Commission (SEC) and cryptocurrency companies continue their legal battle over whether or not crypto tokens are securities.

Lubin stated : “I anticipate that with previous technologies like the internet, the web, and cryptography, clear heads will prevail.”

He added that he expects America will recognize that decentralized protocols, blockchain technology, and cryptocurrencies are compatible with American ideals.

Lubin, who is also the CEO of the blockchain technology company ConsenSys, predicted that a large portion of the rest of the world would adopt a similar strategy.

Gensler is Wrong about Most Crypto Being Securities

Crypto companies like Binance, Coinbase, and Ripple are defending litigation from the SEC after the agency accused them of breaking the law.

In 2020, the SEC filed a lawsuit against Ripple  and its co-founders, alleging that they had sold their native cryptocurrency, XRP, without first registering it with the agency.

In the meantime, the SEC charged Coinbase in June with running an unlicensed exchange and broker. Binance was accused of breaking various securities laws in the same month.

In his written testimony  to the House Financial Services Committee in April, SEC chief Gary Gensler stated that “the vast majority of crypto tokens are securities,” adding that in this situation, crypto tokens must be registered with the SEC.

Although they need to be proven to be securities, Gensler “said that he believed that many tokens are securities. He cannot simply declare that, said Lubin.

According to Lubin, ether should not be considered a commodity but rather more of an oil-like commodity, as he said in a March interview with CNBC. At that time, he stated that “people buy oil barrels with the expectation of profit.”

“I stand by my conviction that Ether is a commodity,” Lubin said .

Leaders in the crypto industry have retaliated  against the United States for the lack of clarity in the country’s crypto legislation and have threatened to depart if the SEC continues to target crypto firms.

According to Lubin, “a lot of countries take some of their lead from the U.S.”

Decentralized protocol technology aims to reduce and eventually do away with the myriad ways in which the U.S. exerts influence on the world through financial and other middlemen.

The United States also values free markets, capitalism, and free speech, according to Lubin.

The Ripple Effect

American cryptocurrency companies like Galaxy Digital have said they planned to shift some business outside  of the nation due to regulatory uncertainties.

With Judge Analisa Torres’ decision that XRP was not a security when sold to retail investors on the secondary market and would only be a security when sold as part of an investment contract to institutional investors, Ripple’s partial victory against the SEC in July may have changed perceptions about leaving the United States.

However, it doesn’t seem as though that decision, together with Grayscale’s victory last month against the agency regarding the conversion of its GBTC fund into a spot bitcoin ETF, has had much of an impact on Gensler’s opinion of the sector.

“This crypto space that much of it, without prejudging any one token, much of it is under the securities laws, but unfortunately, much of it is also non-compliant,” Gensler said , adding that the industry has harmed millions of investors and could have a negative effect on the wider financial system.

In a similar move to the one it took against the podcast Impact Theory last month, the SEC yesterday increased its focus on the NFT industry by accusing the NFT television program Stoner Cats of executing an unregistered offering.

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