Amid the ongoing legal skirmishes between the US Securities and Exchange Commission (SEC) and the cryptocurrency industry, Ethereum co-founder Joseph Lubin remains unfazed. Lubin, who also serves as CEO of ConsenSys, the blockchain-based financial infrastructure company, gave during a recent interview with CNBC.
When asked what he would say to regulators who claim Ether is a security, Lubin did not mince words.
“The SEC has spoken,” Lubin stressed. “The SEC has really spoken, the CFTC has spoken very clearly [..] a number of times they view Ether as a commodity and not a security.”
To put his response into context, Lubin referenced the recent release of a trove of digital documents related to a 2018 speech by former SEC director William Hinman. The documents, which later became known as the Hinman emails, revealed that the director did not consider Ether a security at the time and also revealed a wide range of varying and conflicting opinions on the matter within the SEC’s own walls.
“It’s really a done deal at this point,” Lubin explained. “Maybe there are some regulators in the United States who can’t bring themselves to say that Ether is not security, but I don’t know why that is the case. And in the end it just doesn’t matter.”
The reference to “one or two regulators” was a thinly veiled goodbye shot at SEC Chairman Gary Gensler, who led what many called a “regulation by enforcement” approach to the crypto industry in the United States.
The securities classification roller coaster
Securities are financial instruments often associated with investment contracts, while commodities are basic or raw goods such as gold, wheat or livestock. Lubin is neither the first nor the only one to challenge Ether’s trading status; Rostin Behnam, chairman of the Commodity Futures Trading Commission (CFTC), has taken a similar stance, stating that while many cryptocurrencies are securities, the three main assets – Bitcoin (BTC), Ethereum and Tether (USDT) – fall under the jurisdiction of the CFTC should fall as commodities. .
By contrast, Chairman Gensler’s public statements have only explicitly classified Bitcoin as a commodity, though he has remained coy about Ether’s classification. Some of his readings from his tenure as an MIT professor suggest that he once considered Ether a security, while others imply that he believed it had transitioned from a security to a commodity by 2018.
The ambiguity surrounding Ether’s classification has prompted members of Congress, including Cynthia Lummis and Kirsten Gillibrand, to draft legislation to clear up the issue. They have expressed their agreement with the CFTC’s view that Ether, like Bitcoin, is a commodity.