PoS crypto-currencies soon regulated as securities?

The president of the SEC Gary Gensler again suggests that tokens associated with the proof-of-stakeas ETHshould be regulated as titles. Is a new regulatory tightening in preparation in the US?

Since the episodes of 2022, including the FTX bankruptcy, authorities have been advocating for tighter regulation on crypto-assets. U.S. SEC Chairman, Gary Genslerspearheading this regulatory push, promotes a measure.

The head of the Commission had the opportunity to justify it on Wednesday, March 15, at a meeting of the stock market watchdog. Gensler considers that the proof-of-stake tokens could be qualified as securities.

Token operators pushed toward compliance

These cryptocurrencies would then inherit the same regulations as securities. This is not the first time that Gary Gensler defends such a scenario. He already put forward this thesis last September, when Ethereum was finalizing The Merge.

At the time, Gensler believed that cryptos and intermediaries offering token holders staking should submit to the Howey’s test. This test aims to determine whether or not the token is equivalent to an investment contract and thus to a security.

For the SEC Chairman, the payment of a return through the staking would justify a regulatory crackdown on these digital assets. Moreover, the creators of the underlying protocols would tend to promote these returns on social networks.

I would suggest that each of these token operators, obviously in consultation with the appropriate people, seek compliance,” Gary Gensler now states.

ETH security for New York prosecutor

Shouldn’t authorities expect to face outright hostility from the crypto industry to such a scenario? It’s not out of the question, if not likely. Crypto companies have so far tried to avoid the label of securityThis is a binding agreement, particularly in terms of investor protections.

The position of the SEC and its boss underlines once again the willingness of the authorities to impose more obligations on the industry, including by regulating staking services. Last month, Kraken was heavily fined and banned from offering passive income in the United States.

Now KuCoin is being targeted for similar reasons. New York State Attorney General Letitia James has filed suit against the exchange. The reason? Not having registered with the SEC.

Regulators not unanimous on the nature of crypto

The prosecutor blames KuCoin for letting New York-based investors trade LUNA, TerraUSD and ETH. However, she argues, these tokens are from securities and commodities.

Specifically with respect to ether, this is a title for Letitia James. However, this definition is not unanimous among authorities. For the president of the CFTC, Rostin Behnam, ETH would be a commodity.

What does Gary Gensler think? “I will not I will not comment on any particular token “, he kicks the ball. But there is no question of seeing this as a criticism of the CFTC.

“As far as the Commodity Futures Trading Commission is concerned, I love it,” the executive adds. This is a plea for more legal clarity, as Ripple and Coinbase, among others, are calling for.

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