Ethereum co-founder faces accusations of encouraging fraudulent activity

Coinbase notifies users of CFTC subpoena involving Bybit


  • Mr. Huber accused Joseph Lubin, Ethereum’s co-founder, of encouraging investors to create multiple pseudonymous identities to secretly invest large amounts in Ethereum, potentially constituting fraudulent behavior.
  • Former Ethereum developer Christoph Jentzsch defended Lubin, stating that using multiple identities is standard in crypto for privacy and that Ethereum was marketed as a commodity, not a security.

The crypto industry is abuzz with a new controversy involving Joseph Lubin, the co-founder of Ethereum. On-chain investigator Mr. Huber, has accused Lubin of promoting fraudulent behavior within the crypto space, a claim that has caught the attention of both enthusiasts and skeptics alike.

The accusation: A question of ethics and integrity

The crux of the controversy lies in an audio clip shared by Mr. Huber, titled “Ethereum: Some Economic Considerations.” In this recording, Lubin is allegedly heard advising investors to create multiple pseudonymous identities. This strategy, according to Lubin’s supposed recommendation, would allow large investments in Ethereum to occur without causing public alarm. Huber argues that such advice is not only unethical but potentially fraudulent, as it suggests a method for individuals to invest heavily in Ethereum while concealing the true extent of their involvement.

Response from Ethereum’s camp: A matter of privacy or deception?

In the wake of these allegations, Christoph Jentzsch, a former Ethereum developer, has stepped forward to defend Lubin. Jentzsch contends that having multiple accounts in the crypto world is a standard practice, intended to keep the size of investments private. He emphasizes that this was a known aspect of Ethereum’s sale process and was intentionally designed to protect investor privacy.

Jentzsch further addresses the heart of the controversy – the nature of Ethereum itself. He argues that if Ethereum had been sold as a security, the implications of owning multiple accounts might be different. However, he maintains that Ethereum was marketed as a commodity, a stance that aligns with the Ethereum team’s original vision of the digital token.

Huber’s allegations have sparked a wave of debate among X users, revealing a split in the community. The debate centers around whether Ethereum should be classified as a security or a commodity. This discussion is not just academic; it has significant implications for how Ethereum and similar cryptocurrencies are regulated and perceived. Jentzsch points to a recent hearing with SEC Chairman Gary Gensler, where Gensler stopped short of classifying Ethereum as a security, to support his argument.

This is not the first time Mr. Huber accused Lubin. In October, Huber revealed documents that Lubin may have made misleading statements to the U.S. Securities and Exchange Commission (SEC) regarding the concentration levels of Ethereum investors. Mr. Huber alleges that Lubin did not disclose efforts to obscure major Ethereum stakeholders, raising questions about Lubin’s forthrightness on the distribution and mining power of ether tokens. This issue was intensified by claims from Steven Nerayoff, an advisor to Ethereum, hinting at potential regulatory violations by Ethereum’s co-founders during the project’s initial coin offering (ICO) in 2014. Nerayoff’s posts allude to an undisclosed document that supposedly provided legal authorization for Ethereum’s ICO. 

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Written by Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.