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#THE_MERGE | #DARK_COMPANIES | #MONEY_LAUNDERING AT ITS #FINEST!
Known as the #Howey_test, it examines whether investors expect to earn a #return from the #work of #THIRD (#ILLEGAL INSIDE TRADERS) #PARTIES. #DARK_COMPANIES | #DIRTY_MONEY aka MONEY LAUNDERING)
#Ether’s New ‘#Staking’ Model Could Draw #SEC #Attention
Known as the #Howey_test, it examines whether investors expect to earn a #return from the #work of third (#ILLEGAL) #parties. #DARK_COMPANIES | aka MONEY LAUNDERING)
#Ether’s New ‘#Staking’ Model Could Draw #SEC #Attention
SEC chairman says system used by ether following #software_update could trigger securities laws
WASHINGTON—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.
“From the coin’s perspective…that’s another indicia that under the Howey test, the investing public is anticipating profits based on the efforts of others,” Mr. Gensler told reporters after a congressional hearing. He said he wasn’t referring to any specific cryptocurrency.
Issuers of securities—a category of assets that includes stocks and bonds—are required to file extensive disclosures with the SEC under laws passed in the 1930s. Exchanges and brokers that facilitate the trading of securities must comply with strict rules designed to protect investors from conflicts of interest. Cryptocurrency issuers and trading platforms face strict liabilities if they sell any assets that are deemed to be securities by the SEC or courts.
Staking is one of two ways in which cryptocurrency networks verify transactions. Used by some of the largest cryptocurrencies—including Solana, Cardano and, as of this week, ether—it allows investors to lock up their tokens for a specified amount of time to receive a return.
If an intermediary such as a crypto exchange offers staking services to its customers, Mr. Gensler said, it “looks very similar—with some changes of labeling—to lending.” The SEC has repeatedly signaled over the past year that firms offering crypto-lending products need to register with the agency and in February forced BlockFi Lending to pay $100 million for failing to do so.
Competition for jurisdiction over crypto is heating up among federal agencies and the congressional committees they answer to. As the Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission, held a hearing Thursday to vet a crypto bill, the Senate Banking Committee, which oversees the SEC, held a simultaneous hearing for members to question Mr. Gensler.
The crypto bill proposed by leaders of the agriculture group last month would specifically designate bitcoin and ether as digital commodities rather than securities. Under current law, such assets have no federal regulator. The bill would grant the CFTC, which oversees derivatives markets, authority to regulate digital commodities.
https://www.wsj.com/articles/ethers-new-staking-model-could-draw-sec-attention-11663266224
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