Ethereum co-founder has asserted that the ethereum foundation is not in any way rattled by ongoing investigations into whether ETH is a security as they know for sure “it is not a security.”
Speaking to TheStreet, during the Collision Tech Conference in New Orleans, Joseph Lubin, ethereum foundation’s co-founder said that this was a major concern when they were developing the platform.
At the time, they were worried that it might be deemed a security and as such, would not be legally sold in the US to unaccredited investors. In view of these concerns he explains:
“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.”
What Regulators Say
The Wall Street Journal’s report said that the currency was in a gray area with regards to regulators, citing concern about the first distribution of ETH that took place in 2014 using an Initial Coin Offering (ICO).
In what was then one of the earliest ICOs in the crypto industry, the ethereum foundation managed to raise a value of $18.3 million (31,000 bitcoins).
Some regulators highlight the fact that some of the project’s investors bought into the platform expecting that the currency would rise in value and they would thus gain a profit from the effort of third parties.
This would make an argument for the regulators that ETH is indeed a security according to the Howey Test.
Gary Gensler, a former chair at the Commodities and Futures Trading Commission said, “There is a strong case that one or both of [Ripple and Ethereum] are noncompliant securities.”
On Tuesday morning ethereum price dropped by as much as 6% when reports came to light that US regulators were investigating the issue.
It has since that time recovered significantly and is trading at $677, up 4% over the past 24 hours according to Coinmarketcap data.