SEC lawsuit claims jurisdiction as ETH nodes 'clustered' in US
The SEC argues that because ETH validators are more densely concentrated in the United States, ETH transactions are considered to take place in the country .
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The Securities Exchange Commission (SEC) has made an unprecedented assertion that Ethereum transactions take place in the United States, as ETH nodes are "clustered more densely" in the United States than in any other country.
The SEC argument is found in a Sept. 19 lawsuit against crypto researcher and YouTuber Ian Balina, which alleged, among numerous other complaints, that Balina conducted an unregistered offering of Sparkster tokens (SPRK) when he formed an investment pool on Telegram in 2018.
The SEC claims that at the time US-based investors participated in the Balina investment pool, ETH contributions were validated by a network of nodes on the Ethereum blockchain, "which are clustered more densely in the United States than in any other country.”
The SEC argued that as a result, "these transactions took place in the United States".
At this point, it is unclear if such a claim will hold up in court or if there is any legal precedent at play. However, currently 42.56% of the 7,807 Ethereum nodes currently located in the United States according to .
Speaking to Cointelegraph, Dr. Aaron Lane, an Australian lawyer and senior researcher at the RMIT Blockchain Innovation Hub, said the distribution of Ethereum nodes was largely irrelevant to the case at hand, explaining:
"The fact that we have a plaintiff based in the United States, a defendant based in the United States and transactions originating in the United States is what is most relevant here. It does not matter that the payment was made on Ethereum, Mastercard or any other payment network for that matter."
Lane said that while the SEC claim was interesting, he added that even if Balina's attorneys do not dispute the jurisdictional issue, it will have no impact on future cases at this time. :
"The defense can concede jurisdiction here, and if they do, that won't be an issue, and if it's not a contested issue, the court won't say anything about it. Any concerns about the.. .
The SEC argues that because ETH validators are more densely concentrated in the United States, ETH transactions are considered to take place in the country .
New
The Securities Exchange Commission (SEC) has made an unprecedented assertion that Ethereum transactions take place in the United States, as ETH nodes are "clustered more densely" in the United States than in any other country.
The SEC argument is found in a Sept. 19 lawsuit against crypto researcher and YouTuber Ian Balina, which alleged, among numerous other complaints, that Balina conducted an unregistered offering of Sparkster tokens (SPRK) when he formed an investment pool on Telegram in 2018.
The SEC claims that at the time US-based investors participated in the Balina investment pool, ETH contributions were validated by a network of nodes on the Ethereum blockchain, "which are clustered more densely in the United States than in any other country.”
The SEC argued that as a result, "these transactions took place in the United States".
At this point, it is unclear if such a claim will hold up in court or if there is any legal precedent at play. However, currently 42.56% of the 7,807 Ethereum nodes currently located in the United States according to .
Speaking to Cointelegraph, Dr. Aaron Lane, an Australian lawyer and senior researcher at the RMIT Blockchain Innovation Hub, said the distribution of Ethereum nodes was largely irrelevant to the case at hand, explaining:
"The fact that we have a plaintiff based in the United States, a defendant based in the United States and transactions originating in the United States is what is most relevant here. It does not matter that the payment was made on Ethereum, Mastercard or any other payment network for that matter."
Lane said that while the SEC claim was interesting, he added that even if Balina's attorneys do not dispute the jurisdictional issue, it will have no impact on future cases at this time. :
"The defense can concede jurisdiction here, and if they do, that won't be an issue, and if it's not a contested issue, the court won't say anything about it. Any concerns about the.. .
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