Ethereum Co-founder Joseph Lubin Reiterates ETH Is Not Security but Commodity like Oil
Ethereum price gained approximately 4 percent in the past 24 hours to trade around $1,815 during the early Asian market on Friday.
In the recent White House annual economic report to Congress, the Joe Biden administration noted that most crypto assets are unregulated securities, a commodity, a derivative, or other financial products, depending on the underlying fundamentals. As a result, all digital assets apart from Bitcoin, primarily viewed as digital gold, have been rushing to get a favorable classification from the United States, among other jurisdictions.
Is Ethereum a Security or a Commodity?
During the 2023 Paris Blockchain Week on Thursday, Ethereum cofounder Joseph Lubin, while speaking with CNBC’s Arjun Kharpal, noted that Ether is not a security. Instead, Lubin indicated that Ethereum should be viewed as a commodity like oil which runs the global economy. Furthermore, investors purchase oil in anticipation of profit without the product being classified as a security.
With Ethereum (ETH) being used to run many Web3 products, Lubin said that the digital asset then qualifies to be classified as a commodity. Earlier this month, New York Attorney General Letitia James filed a lawsuit against the KuCoin crypto exchange for failing to register as a securities and commodities broker-dealer.
“This action is one of the first times a regulator is claiming in court that ETH, one of the largest cryptocurrencies available, is a security. The petition argues that ETH, just like LUNA and UST, is a speculative asset that relies on the efforts of third-party developers in order to provide profit to the holders of ETH,” New York Attorney General Letitia noted in the lawsuit.
Additionally, the Securities and Exchange Commission (SEC) has argued that all digital assets apart from Bitcoin are unregistered securities. Additionally, SEC chair Gary Gensler has publicly stated that all proof-of-stake (PoS) secured blockchains fall under unregistered securities.
As a result, the SEC recently issued Coinbase Global Inc (NASDAQ: COIN) a Wells notice on its staking and listing programs being unregistered securities.
“I’m not worried about ether so much,” Nic Cary, co-founder of Blockchain.com, stated. “I just don’t know where you’re going to target that action even if you wanted to pursue it. Obviously, there are some major lawsuits that are working their way through the US Coinbase has already indicated they’re looking forward to letting this lie on its merits.”
Market Outlook
The Ethereum market has a capitalization of about $219 billion, with its daily traded volume close to Bitcoin’s. According to market data provided by Coingecko, Ethereum reported a 24-hour traded volume of approximately $11 billion, whilst Bitcoin recorded $19.9 billion. Trading around $1,815.98 on Friday, Ethereum added approximately 4 percent during the last 24 hours.
Reportedly, over $33 million worth of Ether in the derivatives market was liquidated in the past 24 hours.
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