Ether Staking Could Trigger Securities Laws - Gensler
While he did not specify any particular crypto, SEC Chairman Gary Gensler said that crypto- Proof-of-stake currencies could be subject to securities laws.
New
Ethereum's upgrade to proof-of-stake may have put the cryptocurrency back in the sights of the Securities and Exchange Commission (SEC).
Speaking to reporters after the Senate Banking Committee on Sept. 15, SEC Chairman Gary Gensler reportedly said that cryptocurrencies and intermediaries that allow holders to "play" their crypto can define it as a security according to the Howey test, according to The Wall Street Journal.
“From a coin perspective […] this is another clue that according to the Howey test, the investing public anticipates profits based on the efforts of others,” Gensler said according to WSJ.
The comments came on the same day as Ethereum (ETH) transitions to proof-of-stake (PoS), meaning the network will no longer rely on energy-intensive “proof-of-work” mining and instead allows validators to verify transactions and create new blocks in a process that involves "staking".
Gensler said that by allowing holders to stake coins, “the investing public anticipates profits based on the efforts of others.”
Gensler went on to say that the intermediaries offering staking services to his clients “look very similar – with some labeling changes – to loans.”
The SEC has previously stated that it does not view ETH as a security, with the Commodity Futures Trading Commission (CFTC) and SEC agreeing that it acts more like a commodity.
The SEC closely monitors the crypto space, especially those it deems are securities. The regulator was involved in a case against Ripple Labs regarding the launch of the XRP token.
While he did not specify any particular crypto, SEC Chairman Gary Gensler said that crypto- Proof-of-stake currencies could be subject to securities laws.
New
Ethereum's upgrade to proof-of-stake may have put the cryptocurrency back in the sights of the Securities and Exchange Commission (SEC).
Speaking to reporters after the Senate Banking Committee on Sept. 15, SEC Chairman Gary Gensler reportedly said that cryptocurrencies and intermediaries that allow holders to "play" their crypto can define it as a security according to the Howey test, according to The Wall Street Journal.
“From a coin perspective […] this is another clue that according to the Howey test, the investing public anticipates profits based on the efforts of others,” Gensler said according to WSJ.
The comments came on the same day as Ethereum (ETH) transitions to proof-of-stake (PoS), meaning the network will no longer rely on energy-intensive “proof-of-work” mining and instead allows validators to verify transactions and create new blocks in a process that involves "staking".
Gensler said that by allowing holders to stake coins, “the investing public anticipates profits based on the efforts of others.”
Gensler went on to say that the intermediaries offering staking services to his clients “look very similar – with some labeling changes – to loans.”
The SEC has previously stated that it does not view ETH as a security, with the Commodity Futures Trading Commission (CFTC) and SEC agreeing that it acts more like a commodity.
The SEC closely monitors the crypto space, especially those it deems are securities. The regulator was involved in a case against Ripple Labs regarding the launch of the XRP token.
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