Federal regulators prepare to pass judgment on Ethereum

Securities and Exchange Commission set to take action against Ethereum that goes far beyond US borders.

Are U.S. Securities and Exchange Commission regulators preparing to phase out Ethereum? Given criticism from officials including SEC Chairman Gary Gensler, it certainly seems possible.

The agency went on a crypto-regulation frenzy in September. First, at its annual The SEC Speaks conference, officials pledged to continue to take enforcement action and urged market participants to come register their products and services. Gensler even suggested that crypto intermediaries should split into separate legal entities and register each of their functions (exchange, broker, custodial functions, etc.) to mitigate conflicts of interest and enhance investor protection.

Then there was an announcement that the SEC's Corporate Finance Division planned to add a Crypto Assets Desk and an Industrial Applications and Services Desk to its disclosure review program this fall. to help register crypto market participants. Then there was testimony before various Senate committees on a bill to overhaul crypto regulation, where Gensler reiterated his belief that almost all digital assets are securities, implicitly endorsing his view that such digital assets and relevant intermediaries should register with the SEC.

But perhaps the biggest shots came when the SEC took aim at Ethereum, perhaps reversing a years-long slack that began when a former SEC official said that Ether (ETH ), along with Bitcoin (BTC), was not a security. In his testimony before the Senate Banking Committee, Gensler suggested that Ethereum's transition to proof-of-stake (PoS) from proof-of-work could have put Ethereum under the purview of the SEC because, by staking coins, “the investing public [is] anticipating profits based on the efforts of others.”

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