Joseph Lubin and Brad Garlinghouse Weigh in on SEC’s Stance on Decentralization
During his speech at ETHDenver on March 5, Ethereum co-founder Joseph Lubin spoke about recent regulatory actions, including the SEC's enforcement action against Kraken.
Lubin commended SEC Chair Gary Gensler for driving decentralization and referred to him as a “shining knight of decentralization.”
He stated that the SEC is doing a great job of pushing projects in the ecosystem to become more decentralized, citing the Kraken case as an example of centralized staking products being classified as security offerings.
Lubin also mentioned that claims of being decentralized do not hold up if the yield paid to stakers is generated by the efforts of others, which could make it a security. Kraken paid a $30 million penalty in February for operating an unregistered security offering through its staking program.
The SEC’s recent actions have drawn criticism from some in the crypto community, including Ripple CEO Brad Garlinghouse and SEC Commissioner Pierce.
Garlinghouse pointed out that registering a token doesn’t necessarily ensure compliance and that there is no infrastructure in place for a registered token to trade.
Additionally, there is no clarity on what constitutes a compliant, registered token. Commissioner Pierce echoed Garlinghouse’s sentiment and expressed uncertainty about the regulation of staking programs, including whether the staking program or individual tokens would be registered.
On the other hand, @DecentFiJC criticized Gensler, implying that he was aware of the shady relationship between FTX and Alameda, which allegedly had a secret line of credit funded by customers’ exchange deposits without their knowledge or consent.