SEC finds way to regulate the Ethereum network under US laws
The commission’s staff said that most of the transactions on the blockchain take place within the United States
20.09.2022 - 07:30
404
1 min
0
What’s new? In a lawsuit against crypto influencer Ian Balina, the Securities and Exchange Commission (SEC) said that the Ethereum network falls entirely under the jurisdiction of the United States. The regulator accuses Balina of failing to register his cryptocurrency Sparkster (SPRK) as a security before the 2018 initial coin offering (ICO). In the complaint, the regulator noted that the assets sent to the accused were “validated by a network of nodes on the Ethereum blockchain, which are clustered more densely in the United States than in any other country,” so state laws apply to those transactions.
More details on the situation. The regulator probably believes that if the majority of Ethereum nodes are concentrated in the US, then all transactions on the network should be considered of American origin. According to Etherscan, as of September 20, 46,19% of blockchain nodes are located in the United States, with Germany in second place at 18,68%.
University of Kentucky law professor Brian Fyre in an interview with Decrypt said that the current situation allows the SEC “to characterize doing business on the Ethereum blockchain, as doing business on a US securities exchange.”
SEC Chair Gary Gensler previously stated that after the network switches to PoS, the Ethereum coin may be classified as a security under the Howey test. The head of the commission noted that the new staking feature allows investors to receive income from the work of third parties, which is one of the signs of a security.
Useful material?
Incidents
Scammers took advantage of the former US president’s recent announcement of a real DeFi protocol
Sep 4, 2024
Technologies
The upgrade is aimed at implementing a new decentralized project governance system
Sep 2, 2024
Incidents
The company placed $2б4 billion in bonds maturing in 2026, but their value has fallen dramatically since the entrepreneur’s arrest
Aug 30, 2024
Incidents
In both cases, depending on the outcome of the investigations, the messenger could be blocked
Aug 29, 2024
Market
The project will offer a decentralized alternative to traditional banking services
Aug 29, 2024
Trends
Within a week of its launch, the platform managed to overtake its main competitor, Pump.fun on the Solana network
Aug 28, 2024