Recently, major members of the cryptocurrency industry engaged in a Twitter debate with Jack Dorsey, a longtime supporter of Bitcoin and former CEO of Twitter. Dorsey’s affirmative reply when asked if Ethereum (ETH) could be categorized as a security sparked a fiery discussion among industry insiders.
On June 6, Udi Wertheimer, a Bitcoin developer at Taproot Wizards, referred to Dorsey as a “clown” in a tweet. This initiated the Twitter argument. In retaliation, Jack Dorsey demanded information on the manners from Wertheimer, asking “ETH is not a security? Teach me, wizard”. In a video posted by Wertheimer from 2005, Gary Gensler, the head of the SEC, stated that Ethereum had achieved decentralization and that the SEC did not consider it a security.
— jack (@jack) June 6, 2023
Tether and VanEck strategist Gabor Gurbacs speculated that Ethereum’s latest switch to proof-of-stake may have potentially violated securities regulations. This statement made it more difficult to determine if Ethereum would fall within the present regulatory framework’s definition of security.
Regulatory Uncertainty: Impact on Cryptocurrency Market and Ethereum’s Status
These Twitter discussions occurred in the context of recent SEC legal actions against significant Bitcoin exchanges Binance and Coinbase. The regulatory agency claimed that both sites sold unregistered securities in the form of tokens. This raised concerns regarding the classification of cryptocurrencies.
Dorsey endorsed a screenshot of a 2015 message from Coinbase CEO Brian Armstrong in a series of tweets to demonstrate his support for Bitcoin. The article underlined the value of concentrating on Bitcoin and referred to Altcoins as diversions. Dorsey expressed support for Armstrong’s position. In a video, Mallers criticized Armstrong for prioritizing Altcoins over Bitcoin and the Lightning Network.
It is important to note that in 2021, while still employed at Twitter, the business released 140 non-fungible tokens (NFTs) based on Ethereum. Dorsey did not personally invest in Ether at the time, though. In August 2021, he underestimated Ethereum’s potential to disrupt established businesses. Doubts were cast upon its ability to achieve that goal.
Dorsey has demonstrated continuous interest in advancing Bitcoin acceptance. He supports and invests in Nostra, a decentralized network integrating Lightning-based payments on the “Damus” platform.
The debate on Ethereum’s security status continues. The approach of regulators toward the evolving cryptocurrency market and relevant laws remains uncertain.
