SEC Chairman: PoS Tokens Are Security And Need To Be Registered
- Gary Gensler, SEC Chairman, told reporters Wednesday that PoS tokens should be considered securities and need to be registered.
- The profit received by the token holder from staking indicates that the token is a security, which needs to be registered under US law.
- Previously, many representatives of the US legal authorities believed that ETH was security.
On Wednesday, SEC Chairman Gary Gensler told reporters that PoS tokens that use the staking protocol could be considered securities. Gensler said the profits received by token holders from staking indicate that the token is a security that must be registered under US law.
“The investing public is anticipating a return, anticipating something on these tokens, whether they’re proof-of-stake tokens, where they’re also looking to get returns on those proof-of-stake tokens and getting 2%, 4 %, 18% returns,(…). Whatever they’re promoting and putting into a protocol, and locking up their tokens in a protocol, a protocol that’s often a small group of entrepreneurs and developers are developing, I would suggest that each of these token operators … seek to come into compliance, and the same with the intermediaries.”Gensler said.
This is not the first time the SEC chairman has expressed his opinion on the need to control ETH or most cryptocurrencies on the market except BTC.
Gensler has previously said that US securities laws may govern proof-of-stake protocols.
In addition, New York Attorney General Letitia James said in a lawsuit against crypto company KuCoin that Ether is unregistered security and that its founders, including Vitalik Buterin, have infringed securities laws of the United States.
The SEC also recently took its first staking service enforcement action and settled with Kraken last month.
Contrary to the above comments, the statement of US Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam last week was quite the opposite, Rostin Behnam said at the time that ether is a commodity.
“It’s not a coincidence that those futures were listed on CFTC markets. We did the analysis, the listing exchange did the legal analysis, and the analysis led to the conclusion that ether is a commodity. I’ve been pretty consistent with that in the past.”He said.
As the 2nd largest cryptocurrency in the market, Ethereum has always generated mixed opinions regarding whether it is an unregistered security, especially the idea of the SEC chairman is, reinforced after Ethereum officially moved from Proof of Work (PoW) to Proof of Stake (PoS) in September 2022.
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