December 11, 2023

Gary Gensler: "Ethereum merger could turn ETH into a security"

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Gary Gensler: “Ethereum merger could turn ETH into a security”

Chairman of the Securities Commissionsecurities and exchanges (SEC) US Gary Gensler warned the Ethereum community that ETH staking after the network merger may be subject to securities laws.

Gary Gensler stated thatA software update and Ethereum merger could turn the second-largest cryptocurrency into a security. Under the current Securities Act, crypto companies providing crypto asset staking services are required to pass a Howey test.

Recall that the Howey test is used by courtsto determine whether a transaction is an investment contract and, accordingly, whether it falls under the jurisdiction of the SEC, followed by mandatory registration.

The final decision remains with the courtsauthorities, however, the SEC is of the opinion that crypto assets, which allow holders to receive passive income, have the characteristics of uncertificated securities from the point of view of the Securities Act of 1933 and the Securities Exchange Act of 1934.

In early September, Gensler spoke at a summit inNew York, where it once again called on cryptocurrency companies to register with the SEC, be it platforms for trading digital assets, cryptocurrency brokers or crypto lending services.