- Jack Dorsey, founder and former CEO of Twitter, claims that Ethereum (ETH) should be classified as a security.
- Dorsey’s comments have sparked controversy in the cryptocurrency community.
- Some analysts suggest that if Ethereum were to be classified as a security, it could lead to a significant drop in its value.
Tech mogul and former Twitter CEO Jack Dorsey have created ripples in the world of cryptocurrency with his bold claim that Ethereum (ETH) is security. Dorsey’s contentious comment was a response to a tweet from Bitcoin developer Udi Wertheimer, which had criticized Ethereum for its high transaction fees and sluggish processing speeds.
The Dorsey Controversy
Taking to Twitter, Dorsey quipped, “ETH is not a security? Teach me, wizard.” In retaliation, Wertheimer shared a five-year-old video of the United States Securities Exchange Commission (SEC) Chair Gary Gensler, who stated that Ethereum was now sufficiently decentralized and not classified as a security.
However, Gabor Gurbacs, who serves as a strategic adviser to the stablecoin issuer Tether and investment management firm VanEck, countered Wertheimer’s argument by pointing out that Ethereum’s recent transition to proof-of-stake may have reignited securities laws. The contentious debate surrounding the classification of ETH as a security or not remains a hot topic in the crypto sphere.
Jack Dorsey, also seemed to endorse a 2015 tweet by Coinbase CEO, Brian Armstrong. The tweet in question referred to alternative cryptocurrencies, or “altcoins,” as a “distraction.” Armstrong argued that Coinbase should, instead, focus on Bitcoin.
— jack (@jack) June 6, 2023
Dorsey’s tweets also unabashedly supported Bitcoin, and he went on to retweet a video of Jack Mallers, CEO of Bitcoin Lightning application Strike. In the video, Mallers criticized Armstrong’s decision to prioritize altcoins, urging him to redirect his efforts toward building on the Bitcoin platform and the Lightning Network.
Dorsey Received Skepticism
In the wake of Jack Dorsey’s recent comments that Ethereum may be deemed a security, members of the Ethereum community have expressed their skepticism. Analysts fear that if Ethereum were to be categorized as a security, it could lead to a significant drop in its value.
While he has been praised by some for his unwavering loyalty to Bitcoin, others in the cryptocurrency community have accused him of being close-minded towards other digital currencies. One tweet from Dorsey in 2019 stated unequivocally that he is a Bitcoin supporter, saying “I only have Bitcoin.”
Dorsey’s History with ETH
Dorsey wasn’t really a fan of Ether from the very beginning. Even when he was leading Twitter in 2021, Dorsey showed reluctance to invest in Ether, the cryptocurrency behind Ethereum. Despite the fact that the company sold 140 Ethereum-based non-fungible tokens (NFTs), Dorsey remained committed to Bitcoin and rejected the opportunity to invest in Ether.
In August of 2021, Dorsey also downplayed Ethereum’s potential to disrupt big tech. While some view Ethereum as a competitor to Bitcoin, Dorsey appears to see it as less of a threat. Instead, he has thrown his support behind Nostr, a decentralized network that bills itself as a “Twitter killer.”
Interestingly, this platform integrates Bitcoin Lightning-based payments in their system. Dorsey’s support for Nostr suggests that he is very much invested in the future of digital currencies, even if his views on potential rivals differ from others in the community.
In the ever-evolving world of cryptocurrency, controversies are a dime a dozen. Jack Dorsey, the co-founder, and CEO of Twitter, has sparked one such controversy by claiming that Ethereum should be classified as a security. While the US Securities and Exchange Commission (SEC) has not yet made this classification, Dorsey’s statement has reignited the debate over whether or not Ethereum qualifies as a security.
For investors and traders in the cryptocurrency market, this debate carries important implications. With the SEC yet to make a definitive statement on the matter, the true nature of Ethereum remains uncertain.