Ethereum co-founder Joseph Lubin says the strength of the crypto ecosystem “has never been better or stronger.” He believes “more clarity” from regulators would be helpful for the crypto industry. “I think our industry has suffered from having two major factions lumped into one: the money-crypto faction … and the tech-crypto faction,” he explained.
Ethereum’s Co-Founder on Crypto Ecosystem, Regulation
Ethereum co-founder Joseph Lubin discussed the state of the crypto ecosystem, regulation, and whether ether (ETH) is a security in an interview with CNBC last Wednesday.
“The strength of our ecosystem has never been better or stronger,” he began. While noting that “There are certainly headwinds — some microeconomic, financial headwinds — out in the world,” as well as “banking issues for a small number of companies” in the crypto space, he emphasized: “The sizes of the conferences that are going on in Paris and Denver and Los Angeles have never been bigger.” The Ethereum co-founder added:
Once the builders come into our ecosystem to build essentially an alternative economy, they don’t leave. The speculators run in and they run out, but the building has never been better.
Commenting on why the prices of bitcoin and ether have been rising, he said: “Because they’re sound. Bitcoin is sound money. Ether is ultrasound money … the development, the use cases, the usability, the scalability in the Ethereum ecosystem — it’s never been better. It’s accelerating.” Lubin also noted that the possibility of the Federal Reserve hiking interest rates less aggressively in the future has helped boost the prices of cryptocurrencies. “It’s an inflation hedge,” he stressed.
Regarding cryptocurrency regulation and the aggressive enforcement actions by the U.S. Securities and Exchange Commission (SEC), the Ethereum co-founder opined:
I think more clarity, being more explicit would be helpful to our industry. I think our industry has suffered from having two major factions lumped into one: the money crypto faction … and the tech crypto faction, which is just building decentralized protocols infrastructure.
While noting that “Money crypto absolutely should be regulated” and “Money crypto people issued tokens that are rightly seen as securities,” he argued: “Tech crypto people are just technologists. We are just building infrastructure that the traditional economy can use, and our economy can use, and you don’t want to regulate innovation.”
Is Ether a Security?
Lubin also commented on regulators alleging that ether is a security. Responding to the claim made by the New York Attorney General in its lawsuit against crypto exchange Kucoin that ETH is a security, the Ethereum co-founder said: “Anybody can say anything, it doesn’t make it true.”
SEC Chairman Gary Gensler has stated several times that all crypto tokens besides bitcoin are securities “because there’s a group in the middle and the public is anticipating profits based on that group.” Lubin argued:
People buy barrels of oil with the expectation of profit.
When asked whether he is confident that ether is not a security, the Ethereum co-founder replied: “I don’t think there’s any point to speculate on something that is extremely unlikely.”
There are differing opinions among U.S. regulators about whether ether should be classified as a security. SEC Chair Gensler believes that ETH is a security, while the chairman of the Commodity Futures Trading Commission (CFTC) has stated multiple times that it is a commodity. However, both regulators agree that bitcoin is a commodity.
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