SEC chief warns merger update could turn ETH into a security token
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Answer SEC chief warns merger update could turn ETH into a security token
As the world watched the Ethereum network go through its most significant transition to Proof-of-Stake (PoS) on Thursday, SEC chair Gary Gensler also had a deaf ear.
Shortly after the merger event on Thursday, September 15, the head of the SEC said that cryptocurrencies and brokers that allow users to take “stake bonuses” will have to pass Howey’s test to determine whether that asset is safe.
Howey’s test determines whether investors expect a return from third-party action.
After Thursday’s congressional hearing, the Securities and Exchange Commission chairman told reporters:
Gensler added that he was not referring to any cryptocurrency at this point.
But the announcement, coming right after the merger upgrade, may ring some bells, according to a Wall Street Journal report.
The Securities and Exchange Commission (SEC) has been quite clear about acquiring digital assets under securities laws, especially those cryptocurrencies that are being sold with promises of future profits.
Allocation of crypto:
Even before the Ethereum Merge upgrade, the Proof-of-Stake (PoS) model was very popular with staking as a way to verify blockchain transactions.
The head of the SEC said that if a cryptocurrency trading platform offers quota services to its clients, it looks very similar to lending platforms and listed companies.
Mr. Gensler has repeatedly stated that companies that offer crypto-lending products need to register with the agency.
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