Is Ethereum A Stock? SEC’s New Stance Revealed

The legal battle over how cryptocurrencies, especially Ethereum, should be regulated in the United States has entered a new phase.According to the latest court Documents to be submitted, SEC Chairman Gary Gensler has believed that Ethereum is a security for at least a year. This is very important because if ETH is a security, it must follow stricter regulatory guidelines that apply to traditional financial assets such as stocks.

Ethereum

These revelations came after ConsenSys, a company with close ties to Ethereum, filed a lawsuit against the SEC. Following Wells’ notice, blockchain companies challenged the regulator’s approach, arguing that the ad hoc enforcement action was an overreach of its powers. Mr. Wells is believed to have formally indicated that the SEC may sue him for failing to comply with securities laws.

Furthermore, ConsenSys believes that labeling software developers who create user-managed tools as stockbrokers will prevent Web3 developers from building future generations of applications on their own, and that ConsenSys will continue to support the world’s second-largest blockchain They argued that access to market participants and institutions with stakes in the market could be hindered.

The SEC cannot arbitrarily expand its jurisdiction to regulate what is a commodity, expressly and with the SEC’s own prior approval. We hope this case will draw attention to and ultimately stop the SEC’s reckless approach, restoring the regulatory certainty and soundness essential to an innovation economy that works well with Web3 technologies. Masu.

Ethereum’s legal ambiguity: from Hinman’s declaration to SEC investigation

Prior to that, the SEC formally investigated Ethereum in March 2023. This allows the SEC to subpoena people and companies involved in Ethereum transactions to determine whether they are violating securities laws. This was in stark contrast to the previous example.

In 2018, former SEC official Bill Hinman stated that Ethereum is not a security, sparking a huge positive reaction in the market. His view was that Ethereum and Bitcoin are “sufficiently decentralized” and should not be regulated as securities. Adding to the confusion over how various U.S. agencies recognize and regulate cryptocurrencies is the Commodity Futures Trading Commission. [CFTC] ETH was also classified as a commodity.

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