Ethereum’s New Staking Model Attracts SEC!

After a long delay, on Thursday, September 15, the network was finally transformed into proof-of-stake (PoS) from proof-of-work (PoW). This transition is expected to improve the network’s stability and reduce energy usage by 99.95%.

While the ETH holders are rejoicing with the merger, the US regulator, Securities Exchange, and Commission (SEC) are now viewing ETH as security. Right after the merge was completed, gary gensler gary gensler Gary Gensler is the chairman of the U.S. Securities and Exchange Commission (SEC). His studies in finance and blockchain at MIT have helped him develop U.S. cryptocurrency regulations and policies. Quick Facts Full name Gary Scott Gensler Birth 18-10-1957, Baltimore, Maryland, United States Nationality American Education MBA from the University of Pennsylvania Marital status Married to Francesca Danieli (1986-2006) Net worth Estimated $100 million   Gensler has advocated for enhanced supervision of digital assets, seeking to regulate cryptocurrencies similar to securities. His work at the SEC has focused on safeguarding investors, regulating crypto exchanges, and establishing stablecoin policies.   Gary Gensler - Career Highlights 1997 – Became Assistant Secretary of the Treasury. 2009 – Led CFTC, regulating financial derivatives post-2008 crisis. 2018 – Taught blockchain and crypto at MIT. 2021 – Appointed SEC Chairman, focusing on crypto regulations. 2022 – Proposed stricter rules for crypto exchanges. 2023 – Took legal action against major crypto firms. 2024 – Advocated for stronger stablecoin and DeFi regulations.   Gary has collaborated with multiple lawmakers in formulating crypto policies. Even with disagreements with crypto investors regarding crypto policies, he continues to be a key player in the changing dynamic between regulatory frameworks and blockchain advancement.   Awards & Recognitions of Gary Gensler Year Institution  Description 2009 U.S. Treasury Financial Regulation Leader 2018 MIT Blockchain & Crypto Educator 2021 SEC SEC Chairman Overseeing Crypto Policies 2023 Bloomberg Most Influential Regulator in Crypto 2024 Forbes Top Policy Maker in Digital Assets   Useful Links to Connect With Gary Gensler Platform Link X (formerly Twitter) twitter.com/GaryGensler CFTC website Chairman Gary Gensler   Chairman , SEC Chairman claimed that all the cryptocurrencies and platforms that give an opportunity for its holders to stake their holdings will have to pass the Howey test used by judiciaries to know if the asset is secure. The Howey Test makes an effort to investigate whether the market participants are expecting any returns from the third party.

As per the law that was passed in the 1930s, the one who issues securities, the assets that involve stocks and bonds, should submit a disclosure to the SEC. Also the exchange platforms along with brokers who allow the trading of securities must adhere to the rules meant to protect investors. 

Ethereum To Register Under SEC

If the rules aren’t followed, the exchanges and brokers will have to encounter strict liabilities.

Staking is a way through which the crypto networks verify the transactions which allow investors to hold on to their currencies for a time so that they get some returns. The networks include Solana, Cardano, and now Ethereum too.

Even in the past, the SEC has urged that those platforms that are allowing crypto-lending products are required to register with them and when BlockFi Lending went against the claim, they were forced to pay $100 million.

The agriculture committee has recently proposed a crypto bill that especially mentions that Bitcoin and Ethereum are digital commodities and not securities. Exchanges such as coinbase coinbase - [email protected] WalletCentralised Exchange  and FTX will have to register with the Commodity Futures Trading Commission so that the commission can track the trading and defend investors from any kind of abuse.

On the other hand, the judiciary from Consumer-protection claims that the CFTC doesn’t hold the good experience and resources to understand small inventors. Now, the SEC is expected to either draft a disclosure frame or offer incentives for the organizations that make an effort to reduce energy consumption.