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SEC’s Gensler Signals Extra Scrutiny for Proof-of-Stake Cryptocurrencies: Report
Speaking after the Merge (but not specifically about Ethereum), SEC Chair Gary Gensler said proof-of-stake cryptos could be investment contracts that subject them to securities regulations.
By Danny Nelson
Updated May 11, 2023, 6:37 p.m. Published Sep 15, 2022, 7:42 p.m.
U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler on Thursday said that staked cryptocurrencies may be subject to federal securities regulations, repeating a pro-oversight stance in the wake of Ethereum’s transition to just such a method.
According to the Wall Street Journal, Gensler said that proof-of-stake (PoS) blockchains, which generate new coins for inventors who pool their holdings, take on investment contract-like attributes that could bring them under his agency’s purview. He said he wasn’t talking about a specific coin, according to the Journal.
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Still, the comments, which came hours after Ethereum completed its PoS transition via the Merge, indicate that the milestone tech upgrade may carry greater ramifications for the second-most popular blockchain than simply cutting its energy usage. As a proof-of-work chain, its native ether token was one of only two cryptos – the other being bitcoin – clearly defined as commodities by federal regulators.
Read more: CFTC Already Preparing to Be Crypto Watchdog, Behnam Tells US Senators
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