• 24 June, 2024
News

U.S. SEC’s Gensler Hints Staking Might Make ETH a Security

The Commodity Futures Trading Commission (CFTC) reportedly called Ethereum (ETH) a security in a December court filing. In the CFTC’s FTX lawsuit, the regulator stated,

Certain digital assets are ‘commodities,’ including Bitcoin (BTC), Ether (ETH), Tether (USDT) and others, as defined under Section 1a(9) of the Act, 7 U.S.C. § 1a(9).

Now, Gary Gensler, Chairman, the U.S. Securities and Exchange Commission has raised similar concerns. Gensler indirectly refers to ETH, hinting that the post-merge ‘staking’ of Ethereum (now a proof-of-stake) might make it a security.

The SEC might consider the ETH tokens as securities due to a software feature of the Ethereum 2.0 Network. But Gensler refrains from generalizing his statement for all other digital coins.

Ark Invest’s Catherine Wood, in a YouTube video uploaded by a cryptocurrency YouTuber, Jungle Inc, reviews Gensler’s crypto stance. Sharing the video, Jungle Inc tweeted:

Cathie opines the problem lies with the companies not the blockchains. She is bullish on cryptocurrency adoption in the upcoming prime time.

Ambiguity still exists in the SEC’s stance pertaining to the consideration of all or specific cryptocurrencies as securities. The U.S. regulators largely and mostly agree that Bitcoin is not a security.

In 2018, Ethereum was also not considered a security. Some SEC officials reportedly believe the Ethereum Foundation is now largely decentralized, after initially issuing Ether to raise money. But Gensler disagrees.

Gensler questions Ethereum’s post-merge September shift from the proof-of-work to the proof-of-stake. He asks if the interest offered on deposits makes the “staked” ETH tokens a security.

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