WSJ: Ether’s new ‘staking’ model could draw SEC attention

09/15 23:33

According to WSJ, Ethereum’s big software update on Thursday may have turned the second-largest cryptocurrency into a security in the eyes of a top U.S. regulator. Securities and Exchange Commission Chairman Gary Gensler said Thursday that cryptocurrencies and intermediaries that allow holders to “stake” their coins might pass a key test used by courts to determine whether an asset is a security. Known as the Howey test, it examines whether investors expect to earn a return from the work of third parties. “From the coin’s perspective…this is another indication that under the Howey Test, the investing public expects gains based on the efforts of others,” Mr. Gensler told reporters after a congressional hearing. He said he was not referring to any specific cryptocurrency. When an intermediary like a crypto exchange offers staking services to its customers, Gensler said, “it looks a lot like lending — with some labeling changes.”
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