The SEC wants to take a fresh look at Ethereum
Switching from PoW to PoS could have legal ramifications for ETH
The US Securities and Exchange Commission (SEC) has been watching the cryptocurrency market for a long time, and after the recent update of the Ethereum network, committee chairman Gary Gensler once again turned his attention to the ETH. In his opinion, ETH staking looks very similar to a reverse lending system where users borrow their coins in exchange for rewards. This is another attempt to classify cryptocurrencies as the securities for which Gensler is known.
Ethereum may have problems with the SEC again
The SEC is keeping a close eye on the rapidly changing trends in the cryptocurrency sector. Since staking has become the primary means of earning money on ETH and mining has gone into oblivion, SEC chairman Gary Gensler has been stepping up his efforts to regulate the cryptocurrency market.
Answering questions from reporters after the Senate Banking Committee on September 15, SEC chairman Gary Gensler stated that cryptocurrencies and a number of staking brokers meet the howey test and should therefore comply with securities law.
According to the Howey test, a transaction can be called an investment contract if it meets the following criteria: funds are invested (not only in the form of cash), the investment is in a joint venture, profits and efforts from the issuer or a third party are expected, without the investor's involvement .
"According to the Howey test, ETH staking allows investors to generate profits based on the efforts of others, without involving the investors themselves," said Gensler.
The head of the SEC also stated that staking services are not much different from lending.
Gensler's statement represents a major shift in the attitude of the American institution, which previously viewed ETH as a commodity rather than a security. It is possible that the second largest cryptocurrency in terms of overall market capitalization may face a legal battle similar to XRP, i.e. a project that wages a war with the SEC in front of the American judiciary.
