Ethereum, the platform that enabled non-fungible tokens (NFTs), implemented a meilleur établissement last week. Blockchain switched from a power-intensive Proof of Work accord model to Proof of Stake, cutting it off 99% carbon emissions Overnight. The merger, as the établissement was called, transformed the system behind ether, the world’s attaché most valuable cryptocurrency.
Instead of relying on a network of massive computers spending the Netherlands’ annual electricity sortie, Ethereum now uses a process in which users share – or subtract – ether in order to win the right to succès new compromis data on the blockchain.
The merger has been widely hailed as a win-win for the environment in the midst of the climate crisis, but it may also be what pushes the network into the crosshairs of US securities regulators.
The Securities and Exchange Certificat is monitorage ethereum
US Securities and Exchange Certificat Chairman Gary Gensler He said in a statement On September 15, staking-based cryptocurrencies are very likely to be securities that must be regulated by the agency. This raises a problem for Ethereum, which could be shipped or aggressively weaponized for SEC compliance in the near future. Registered securities must disclose their conduite team, provide regular financial updates, and identify potential négoce risks.
Under Proof of Stake, users earn ether by locking their coins and validating transactions. When auditors share their coins, Gensler said, it’s an exégèse that “the investing notoire expects opimes based on the efforts of others” — just as when a shareholder invests with the expectative that the company will turn a avantage.
Gensler explained that he was talking embout staking-based cryptocurrencies in general, and not embout Ethereum specifically, but his comments came shortly after ether became the largest cryptocurrency by market cap using Proof of Stake.
Does ether pass the Howey apprentissage after merging?
The SEC chairman said that staking-based cryptocurrencies are likely to pass the Howey Critérium, a normalisé for determining whether an asset is an SEC-regulated security or a commodity, similar to precious metals or insolite natural resources.
Under the Howey apprentissage, which stems from a 1946 Supreme Laconique ruling, a compromis qualifies as security if it includes an investment contract “in which there is an investment of money in a accompagné venture with a reasonable expectative of avantage to be gained from the efforts of others”.
In a oraison on September 8, Gensler said that much of the cryptocurrency industry has met Howey’s apprentissage and is therefore operating illegally by not registering with the Securities and Exchange Certificat. “Out of the roughly 10,000 tokens in the cryptocurrency market, I think the vast majority are securities,” Gensler said. “Offers and sales of these thousands of crypto-security tokens are covered by securities laws.”
Crypto advocates have pushed to regulate cryptocurrencies under the Commodity Futures Trading Certificat (CFTC), which they believe will be less demanding than the Securities and Exchange Certificat. Gensler acknowledged that a small number of cryptocurrencies, including bitcoin, may fall under commodity law rather than securities law.