The second largest cryptocurrency, Ethereum, may be under the tight scrutiny of the SEC after it shifted to the Proof-of-Stake model. Is ETH PoS security?
The Securities and Exchange Commission is closely examining the cryptocurrency market. They are already fighting a legal battle against Ripple Labs, the company behind XRP.
The SEC alleges that the Ripple labs sold XRP tokens worth $1.3 Billions between 2013 and 2020 through illegitimate means because XRP wasn’t registered as a security, yet it was offered to investors globally. The curtains could soon fall on the Ripple Labs vs. SEC case, which could set a precedent for future instances in which the crypto’s status as security is being questioned. But before the XRP vs. SEC case can come to a conclusion, there are various speculation if ETH PoS is a security.
Is Ethereum the new target of the SEC?
The SEC Chairman Gary Gensler told reporters from The Wall Street Journal that certain cryptocurrencies that allow staking facilities to their investors might pass the Howey test.
“From the coin’s perspective… that’s another indicia that under the Howey test, the investing public is anticipating profits based on the efforts of others,” Gensler told reporters after a congressional hearing. However, he didn’t name any cryptocurrency specifically.
The Howey test is a crucial criterion used by courts to decide whether an asset should be considered a sec
GIPHY App Key not set. Please check settings