Ethereum Shift Could Bring Regulation

When is a cryptocurrency a security, and when isn’t it? Last week, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler says proof-of-stake (PoS) crypto could be considered securities — this now includes Ethereum, which shifted to PoS this past Thursday.

Gensler told Congress on Thursday that assets which allow the holder to earn passive income through staking could pass the Howey test (Not our Howie) — a test used by courts to classify an asset as a security by determining whether or not an investor can expect to earn income from holding the asset.

Gensler is previously on record claiming Bitcoin is a commodity because it functions under proof-of-work (PoW) protocol.

His latest comments on Ethereum could have implications for other PoS networks like Cardono and Solana, subjecting them to U.S. securities laws.