Joseph Lubin, the co-founder of Ethereum, assured that he did not think that ether should be considered as a financial security and added he did not believe it needed to be regulated. This statement comes a few days after the legislators in the United States of America started discussing the status of this cryptocurrency.
Lubin explained that the founders of Ethereum thought about this possibility and invested time and money to consult this issue with lawyers. Nevertheless, the United States Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) recently announced they were discussing the status of this cryptocurrency. Lubin said: “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.”
Lubin also rejected the creation of regulations for the functioning of Ethereum and added that this platform already has its own internal regulations that perfectly adapt to the legislation of the United States of America. He added: “I think we already have a regulatory scheme; securities laws in this country govern securities. If you fail the Howey test, you’re not a security. This is a way of accessing a shared compute resource, so I’m not sure Ether needs to be regulated in any way.” The Howey test is an instrument used by the Supreme Court since 1946 that established the criteria for considering a transaction an investment contract.
At the end of last month, Gary Gensler, a former director of the CFTC, said that institution could consider both Ethereum and Ripple as financial securities. If this becomes true, thee cryptocurrencies would not be able to be listed and exchanged on the majority of the cryptocurrency exchange platforms because they do not have the license necessary for the trading of this type of financial instruments on the territory of the United States of America.
According to Gensler, both cryptocurrencies are securities that are not compliant with the current legislation of the country. In that case, both Ethereum and Ripple could be violating the laws of the United States. On the other hand, Bitcoin is considered to be a basic product and it is not subject to the regulations established by the SEC.
More on this subject should be known after May 7th, 2018, when, according to the Wall Street Journal (WSJ), a working group formed by senior officials from both the SEC and the CFTC is scheduled to discuss the possibility of regulating the aforementioned cryptocurrencies.