Jack Dorsey Settles The Debate: Ethereum Is A Security

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In the wake of lawsuits against leading crypto exchanges, well-known Bitcoin supporter Jack Dorsey has ignited a stir within the crypto community through his social media advocacy for Bitcoin-centric development. His online interactions have brought contentious debates on the classification of Ether as a security to the forefront.

The Ethereum Tweet that Sparked a War in the Cryptosphere

Jack Dorsey, a prominent supporter of Bitcoin for many years, unexpectedly became a focal point in an online Twitter dispute with numerous cryptocurrency pundits. That came about when Dorsey replied with an affirming “yes” to a query probing whether Ether could be classified as a security. This exchange instigated a widespread reaction within the cryptocurrency community.

The controversy was fuelled further by the response of Udi Wertheimer, an esteemed developer at Bitcoin Ordinals with Taproot Wizards. Interpreting Dorsey’s comment as laughable, Wertheimer inferred the Bitcoin advocate as a “clown” through a tweet dated June 6.

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In retaliation, Dorsey invited a learning opportunity, tweeting, “ETH is not a security? Teach me wizard.” That prompted Wertheimer to enlighten him by sharing a five-year-old video in which the United States Securities Exchange Commission Chair, Gary Gensler, emphasized that Ether had become “sufficiently decentralized” and no longer qualifies as a security.

Ethereum’s Status Reconsidered

Gabor Gurbacs, an adviser to stablecoin issuer Tether and investment management firm VanEck, added to the discussion. Gurbacs commented that Ethereum’s recent transition to a proof-of-stake mechanism could have inadvertently invoked the application of securities laws, offering a different perspective on Ether’s status.

These online exchanges have emerged in light of recent events, specifically the SEC’s lawsuits against cryptocurrency exchanges, Binance and Coinbase. Accused of offering tokens deemed unregistered securities, the cases were lodged on June 5 and 6.

Amid this controversy, Dorsey shared his approval of a 2015 post by Coinbase CEO Brian Armstrong. Armstrong dismissed altcoins as a “distraction,” advocating for a more concentrated focus on Bitcoin. Dorsey echoed this sentiment by underscoring his Bitcoin-centric approach. He continued his Bitcoin endorsement on Twitter, applauding Jack Mallers, CEO of Bitcoin Lightning application Strike, for criticizing Armstrong’s prioritization of altcoins over Bitcoin and the Lightning Network’s development.

Dorsey’s Divergence from Ethereum

Dorsey’s stance on Ethereum is not a recent development. During his tenure as Twitter’s CEO in 2021, the company sold 140 Ethereum-based nonfungible tokens (NFTs). 

Nevertheless, Dorsey chose not to invest in Ether. He further underscored his lack of faith in Ethereum in August 2021, stating that Ethereum alone wouldn’t have the capacity to revolutionize big tech.

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