US Securities and Exchange Commission (SEC) Chairman Gary Gensler suggestedthat Proof-of-Stake (PoS) tokens may be considered securities under US law.
According to the head of the regulator, these types of protocols are usually developed by a small group of entrepreneurs and developers. Gensler believes that all these traders should abide by the rules. The same goes for brokers.
Against the backdrop of all current events, crypto market participants have been subjected to increased scrutiny by regulatory authorities. Some firms are also avoiding securities labeling because it requires more stringent investor protection requirements that may not currently be compatible with the asset class.
The biggest debate around the regulator’s recent stance is whether Ethereum (ETH) is classified as a security. Gensler himself has hinted that he thinks Ethereum can be classified as a security. In his opinion, cryptocurrencies other than bitcoin are usually created by a group of entrepreneurs who use various non-transparent mechanisms to promote their tokens and attract investors.
The SEC is not the only regulator that wants to recognize cryptocurrencies as securities. Last week, New York Attorney General Letitia James sued crypto exchange KuCoin for offering staking products that allowed for passive income.
I am an experienced journalist and writer with a career in the news industry. My focus is on covering Top News stories for World Stock Market, where I provide comprehensive analysis and commentary on markets around the world. I have expertise in writing both long-form articles and shorter pieces that deliver timely, relevant updates to readers.