Jaron Lowery expressed:  Ethereum is a security. It is run by the Ethereum Foundation (EF), and its PoS consensus protocol will give the EF unimpeachable control authority over ETH. Are securities useful? Yes. Will a trust-based security be used as national currency? Not if they want to be sovereign.

This Lowery stated pointing to Gary Gensler statements from a clip from Gensler’s 2018 MIT course on blockchain:  Ethereum when it was first promoted in 2014, I believe passed this Howey Test. And, the word passed means that you are a security, just a little vocabulary thing.

You want to fail the Howey test by the way. Like if you are a venture capitalist and don’t want to be regulated you want to fail this test.  But to pass the Howey test, Ethereum in 2014 exchanged Bitcoin for an ETH.

It was an investment in a common enterprise at that point in time, a 20- or 21-year-old Vitalik Buterin running Ethereum Foundation out of Switzerland.  It was one group – An expectation of Profits. They had no functioning networks. It was an idea and a white paper and a really good idea and good faith actors. And, it was reliant on whether Vitalik and his team of coders were going to stand this project up. To me, I don’t even think there is much doubt about what this was in 2014 when they raised the $18 million.

Community Reaction:  Wait, is Ethereum a platform for launching unregistered securities? Probably worth looking into this.

It was an unregistered security sale. That’s in the past. Problem for the SEC is its charter is to protect retail investors. Rock and a hard place now, shut it down and it violates their charter.

Two things I find amusing about some Bitcoiners. They love Gensler which is weird for a start (but you Americans do choose some odd leaders) and they also seem passionate that Ethereum should not be available to the average person, only be for accredited investors. Bizarre.

Personally, I don’t know much about Gensler so I’m indifferent towards him. Just putting information out that is of interest as it relates to Ethereum’s regulatory status. With regards to usage by the average person, the protocol design that has resulted in ridiculous fees has already alienated the average person.

Ethereum is not beating Bitcoin to become the hardest money and its moat/network effects are being eroded to some extent by other Layer 1s.

Doesn’t help that the ETH maxis are praising L2’s as the solution. While we’re still in this early adopter phase, no one wants to be a 2nd class (L2) citizen when other chains are still letting them be 1st class (L1) citizens.