Gary Gensler – SEC Chain shows his attention to the new Staking model on Ethereum and confirms that these features will trigger the Securities Law.
The Ethereum blockchain network has transferred its platform from PoW to PoS for all its transactions, leading to many controversies around the world.
There is a full disclosure obligation on these projects.
Without any specific token to be pointed out, Gensler stated that the new staking model of the second-biggest virtual currency platform could take the test by courts named Howey to determine whether it is a security or not.
From that point, all crypto issuers and trading platforms have to be triggered by their assets, according to the SEC Securities Law.
In the Ether network, staking allows users to gain their return by locking their tokens at a specific time. This model looks like lending in an intermediary financial entity.
All crypto exchanges would register with the CFTC. This regulation is to enhance the users’ protection. Moreover, exchange platforms have to monitor their trading activities and are only allowed to provide digital assets that are resistant to market manipulation.
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