Ethereum co-founder Joseph Lubin praised SEC Chairman Gary Gensler as a “brilliant gentleman of decentralization.”
Speaking at ETHDenver (which ended March 5), Lubin was candid about recent regulatory compliance actions, calling Gensler a catalyst for pushing decentralization, much to the derision of the audience.
Digital asset investor clipped and posted the relevant portion of the Fireside Chat, which was posted to YouTube on March 14.
Ethereum co-founder says the SEC is doing a great job
Using the recent example of the SEC’s enforcement action against Kraken, Lubin said that the exchange’s staking product was centralized, hence a security offering.
He added that claims that it was decentralized did not hold up when Kraken’s efforts generated the return paid to stakeholders.
“If you advertise that it’s a very decentralized thing in such a way that it looks like people are going to make money from their efforts, only that language can make it a security.”
Under securities laws, the Howey test determines whether a contract, scheme, or transaction meets the definition of a security. It focuses on determining whether investors paid money into a common venture with the expectation of earning a profit from the efforts of others.
Lubin said Gensler and the SEC “are doing a great job pushing projects in our ecosystem to radically decentralize,” driving home that point by calling Gensler a “brilliant gentleman of decentralization.”
On February 9, Kraken settled with the SEC, paying a $30 million penalty, over allegations that it was operating an unregistered security offering through its staking program.
The affair scared off betting providers; However, Coinbase has said that it stands ready to defend its staking program in court if necessary.
not everyone agrees
A history of perceived unfair enforcement actions and recent regulatory rumors have attracted the attention of the crypto community.
For example, the CEO of Ripple brad garlinghouse discarded claims that compliance can be achieved simply by signing up. He said there is no such registration process, nor is there clarity on what constitutes a supported registered token.
“Chairman Gensler continues to insist that companies simply go in and register, but the truth is that there is no infrastructure for trading a “registered token” and no clarity on what these tokens are.“
SEC Commissioner Pierce echoed Garlinghouse’s sentiment, saying she’s not sure whether it’s possible to register a staking product. In that, several unresolved questions remain about how a staking program would be regulated, including whether the staking program would register or individual tokens within the program.
Similarly, criticizing Gensler, @DecentFiJC said: “There is 0% chance he didn’t know about this,” referring to the murky relationship between FTX and sister company Alameda.
Alameda was alleged to have held a secret $65 billion credit facility from FTX, financed by customer exchange deposits without their knowledge or consent.
In a new blow to Ethereum and all Proof-of-Stake (PoS) chains, gensler The recently suggested PoS projects should be regulated as securities.
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