Continuing the regulatory clampdown on the cryptocurrency sector, the New York Attorney General has alleged that the Ethereum network token ETH is a security. It made the assertion in a lawsuit filed against crypto exchange KuCoin, alleging that it is operating in New York state without licenses as a commodities broker-dealer and securities broker-dealer.
Joe Lubin, the founder of ConsenSys, was a major backer of Ethereum in the early days and had a big chunk of ETH at the time of its initial coin offering (ICO). ConsenSys is heavily involved in both crypto and enterprise applications of Ethereum including as maintainer of the Quorum enterprise blockchain. Ethereum was the first permissionless blockchain to show potential for various applications beyond payment, including real world solutions.
Bitcoin is generally considered a commodity, in part because it didn’t have an ICO. But we’ll come back to that. ETH is considered a commodity by the CFTC, and a 2018 speech by SEC Director William Henman implied that ETH probably was a commodity as well.
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