After Regulator Claims, The Co-Founder Of Ethereum Insists That Ether Is Not A Security And Compares It To Oil.

Joseph Lubin, the co-founder of Ethereum, blasted regulators for comparing the ether currency to a security, claiming that it is more comparable to a commodity like oil.

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At Paris Blockchain Week on Thursday, Lubin expressed his "quite confident" belief that ether was not a security in a discussion with Trade Algo.

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Ether would be required to register with regulators and be subject to substantially tighter pre-clearance and reporting requirements if it were treated as such.

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According to Lubin, "anyone can say anything; that doesn't make anything real."

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A lawsuit brought by the New York Attorney General Letitia James against the Seychelles-based cryptocurrency exchange Kucoin alleges the company failed to register as a commodities and securities broker-dealer and falsely identified itself as an exchange, raising concerns that ether may be regarded as a security.

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As one of several tokens published on Kucoin that regulator deemed to be securities, the NYAG's office mentioned ether in the lawsuit, describing it as a "speculative asset" that depends on the efforts of third parties to generate profits for its owners.

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James remarked, "I don't believe it's all that relevant, but it's terrible that that sort of swipe was made.

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In contrast to bitcoin, ether powers a community of applications that let users to transact, borrow money from, and purchase nonfungible tokens.

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With a $212.8 billion market valuation, it is the second-largest token globally.

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According to information from Trade Algo, the price of ether has dropped 2% during the past 24 hours on Thursday.

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In the past, the U.S. The Securities and Exchange Commission also stated that because ether switched to a new "proof of stake" verification scheme, it might be classified as a security.

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A blockchain's validators in a stake proof model lock up a few of their tokens in exchange for maintaining the network's security. They can earn yields that resemble interest by doing this.

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According to some authorities, this model satisfies the Howey Test, which argues that an investment agreement made if funds are invested in a common venture and there is an expectation of benefits from others' labors.

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According to SEC Chair Gary Gensler, any cryptocurrency or middleman that permits users to "stake" their tokens may satisfy the Howey Test. Gensler made this statement to reporters in September.

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Ether should be regarded as a commodity, according to Lubin. They purchase oil barrels in the hope of making a profit, he claimed.

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Lubin responded, "I don't think there's any need to speculate about anything that's exceedingly implausible," when asked again if he thought ether might be a security.

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Recently, the SEC has increased the pressure it applies to the crypto sector, cracking down on businesses and initiatives it believes are offering customers unregistered securities.

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The SEC issued a notice to cryptocurrency exchange Coinbase on Tuesday informing it that it had discovered possible violations of US securities law.

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Participants in the cryptocurrency industry, according to Lubin, are "usually unhappy" with the regulators' activities.

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He said that "greater clarification" was required and said, "I think a few of us believe that a lot of the actions are right and acceptable." We have observed misunderstandings as well as a focus on issues that need closer examination.