Ethereum (ETH)–On October 11, the crypto space erupted in a relative civil war over a series of tweets by Ethereum founder and regulator cryptocurrency figurehead Vitalik Buterin. Buterin, in response to accusations over the amount of Ether he held personally which would propel him to billionaire status, vehemently defended his position as one of the wealth–but not quite billionaire figures in crypto.
According to Buterin, who has been one of the most outspoken and steadfast figures in all of cryptocurrency, not just in support of the second largest cryptocurrency by market cap Ethereum, he has never claimed more than 0.9 percent of the total circulating supply of Ether. Instead Buterin rebuked claims over Twitter that he held an egregious amount of ETH, which currently has a total circulating supply of ~102 million. Buterin responded to claims that he held a near 1 percent total of the supply of ETH (or the equivalent of about one million Ether) with a link to his proposed official Ethereum wallet with a substantially smaller amount totaling just 365,000 coins, worth about $73 million at today’s valuation.
While 73 million dollars still constitutes a significant return for the young cryptocurrency founder, it is far off from the outlandish claims of billionaires status that have regularly been levied against Buterin. According to New York University professor Nouriel Roubini, who instigated the most severe portion of the embattled Twitter landscape against the Ethereum founders when he accused Buterin and fellow co-founder Joe Lubin of attaining a level of wealth estimated in the billions through skimming Ethers coin prior to their public release. While Roubini’s claims go a step further than wealth-shaming Buterin and Lubin, it does draw attention to whether the two were able to profit from an early acquisition of Ether that may have been overlooked in the coin’s meteoric rise over the last year, particularly as the ERC-20 platform has become the standard for the widely popular initial coin offering marketplace,
Roubini’s tweets, which claim that Buterin was the “ring-leader” along with Lubin in a plot to steal “75 percent of the Ether supply and became instant ‘billionaires’ of fake wealth” setup of a storm of Twitter conversation between himself, Buterin and the greater Ethereum investment base over whether the darling child founder had acted inappropriately in the early days of Ether acquisition.
The bigger question, at this point, is whether the market should be concerned about the amount the wealth Buterin has accumulated from his position in kindling and hopefully igniting the second largest cryptocurrency on the marketplace.
On one hand, current Ether investors should feel betrayed if the founder is discovered to be lying about his holding of ETH, in particular if Roubini’s claims prove true about Buterin and Lubin staching vast amounts of Ether in the interim and largely unknown period before the coin was available for investor purchase. Buterin, in response to tweeting out the Etherscan to his report personal wallet, claimed that “there are no criminal laws against pre-mining,” holding to his position that he has never held 1 percent of the total supply of Ether. However, at over 100 million coins, less than full a percent amounts to a substantial amount value, particularly when the coin was sitting at an all time high of $1400 earlier in the year, or $511 million for the amount Buterin report holding in his Etherscan wallet.
The real problem is the perception of unearned wealth that the general public is likely to associate with cryptocurrency founders and early adopters. While no one faults CEOs and early partners in blue chip stocks for attaining a massive amount of wealth through their holdings, crypto is in danger of the appreciation that comes through market buyers and leads to overnight billionaire status. Buterin has been an unwavering source of good for cryptocurrency, especially with his continued focus on the development of the technology and organic adoption–rather than price increase through exchange speculation–but even he may become a distraction for the currency if the investment base feels the deck was stacked against them from the onset of market release.