Joseph Lubin, a Co-founder of ETH, Claims That Ethereum is a Commodity

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Last Updated on August 10, 2023 by Bitfinsider

Since Ethereum wasn’t meant to be just a commodity like Bitcoin, this is also what happens to it. Although transactions involving ether are possible, the blockchain is much more than just a system for electronic trades. It comprises training and providing opportunity for programmers who want to use non-fungible tokens (NFTs), dapps, and other technologies.

The co-founder of Ethereum has weighed in on a discussion regarding what exactly Ethereum is.

The CEO of ConsenSys and co-founder of Ethereum, Joseph Lubin, highlighted how cryptocurrencies are a commodity in a recent interview with CNBC. The US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have already made this point clear.

After the former SEC director stated that he did not at the time believe Ethereum to be a security, Lubin’s remark made sense.

Ethereum was the subject of contentious viewpoints from other individuals with comparable backgrounds, which is why the US government started to regulate and police the cryptocurrency market.

A regular security asset is one that is subject to regulation and requires the disclosure of investment risk.
The SEC determined that Bitcoin can be a security despite its lack of a central authority, despite the fact that standardising all digital assets in this manner is more difficult.

Although the majority of cryptocurrencies are securities, the CFTC chairman said that Bitcoin (BTC), Ethereum (ETH), and USDT should be governed as commodities.

Only Bitcoin was recognised as a commodity by other comparable figures. Governments are not entirely confident in the acceptance of Ethereum because all these perspectives don’t offer a clear perspective on it.
Bitcoin, in contrast, is simpler to categorise.

It is crucial to determine whether a cryptocurrency is a security or a commodity since, without a legal framework, these assets cannot properly function in the real world.

This is so because the government anticipates that those who deal with securities will be profitable. Commodities are exchanged concurrently according to their market value.

The handling of cryptocurrencies that are deemed securities by issuers and exchanges must be done with the appropriate licences from securities authorities, which is difficult to do.

However, since no authority can pinpoint a core factor that impacts the token’s value, issuers can stay out of problems by being decentralised. Because they risk fines for failing to register cryptocurrencies, exchanges may not offer them as securities. State-by-state restrictions run the risk of interfering in this situation, but there are other dangers as well.

However, the argument for treating Bitcoin and Ethereum as commodities is that since they can be traded for one another on exchanges, each Bitcoin has a similar value.

For this reason, the CFTC has categorised Bitcoin, Ethereum, USDT, and even Litecoin (LTC) as commodities since 2021.

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