Ethereum co-founder Joseph Lubin praised SEC Chair Gary Gensler as a “shining knight of decentralization.”
Speaking at ETHDenver (which ended on March 5,) Lubin spoke candidly about recent regulatory enforcement actions, holding Gensler as a catalyst for driving decentralization – much to the audience’s jeers.
Digital Asset Investor clipped and posted the relevant part of the Fireside Chat, which was posted on YouTube on March 14.
Ethereum co-founder says SEC is doing a great job
Using the recent example of SEC enforcement action against Kraken, Lubin said the exchange’s staking product was centralized – therefore, a security offering.
He added that claims of it being decentralized did not stand up when Kraken’s efforts generated the yield paid to stakers.
“If you advertise that you’re a very decentralized thing in such a way that it sounds like people are going to make money based on your effort, just 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 in a common enterprise with the expectation of profits from the efforts of others.
Lubin said that Gensler and the SEC “are doing a great job of driving projects in our ecosystem to radically decentralize themselves” – instilling that point by calling Gensler a “shining knight of decentralization.”
On Feb. 9, Kraken settled with the SEC, paying a $30 million penalty, over allegations it was operating an unregistered security offering through its staking program.
The matter spooked staking providers; however, Coinbase has said it is ready to defend its staking program in court if necessary.
Not everyone agrees
A history of perceived unfair enforcement actions and recent regulatory rumblings has drawn heat from the crypto community.
For example, Ripple CEO Brad Garlinghouse rubbished claims that compliance can be achieved by simply…
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