Stephen Nerayoff: "ETH is a security because Ethereum is centralized"

A former advisor to the Ethereum team said that ether has been a security since the initial coin offering (ICO), and accused the co-founders of the network of fraud.

Steven Nerayoff, in a tweet thread, tried to explain that the Ethereum network has been centralized since its inception, so ETH can be called an investment contract. Ethereum co-founder Joseph Lubin made speculative purchases during the ICO, buying 9.5% of the coins, a former project participant insists.

The statement came amid a legal battle between Joseph Lubin and the US Securities and Exchange Commission (SEC). Recently, his company Consensys filed a lawsuit against the regulator, demanding to prevent it from controlling ether as a security.. Nerayoff called the lawsuit “an attempt to cover up collusion between Ethereum and the SEC.”

Stephen Nerayoff claims Lubin met with former SEC official Bill Hinman just before his famous 2018 speech on the status of airwaves. During the speech, the official announced that ether is not a security. A former member of the Ethereum team is confident that the coordinated efforts of the Ethereum co-founders were aimed at hiding the true centralized nature of the network, which contradicts their statements about the decentralization of the project.

Nerayoff accused the SEC of being biased against Ripple, which has been in a legal battle with the regulator for several years trying to prove that the XRP coin is not a security.. The former Ethereum advisor called on the American authorities to leave Ripple alone and bring the Ethereum team to justice.

Steven Nerayoff recently sued the US government, demanding $9.6 billion in damages for allegedly extorting 10,000 ether from a cryptocurrency startup.