By Zachary Stone
Chairman of the U.S Securities and Exchange Commission Gary Gensler has suggested that tokens that depend on stakers as validators can be considered securities.
Speaking to reporters on Wednesday 15 March, Gensler said investors expect returns on tokens they stake, with just few developers handling the protocol, and there’s need for them to ” come into compliance, and the same with the intermediaries,” implying that they’re securities.
Gensler who had earlier hinted that Ether was a security, gave this view when asked for his opinion by Commodity Futures Trading Commission Chair Rostin Behnam. Behnam so far has maintained his position that Ether is a commodity, contrary to Gensler’s view.
Tightening Standards for Securities
The SEC has voted for a proposal to advance three rules to tighten the regulatory ropes for the securities industry. This includes firms that are involved with digital assets in any way. By his standards, Gensler believes that proof-of-stake tokens are securities under U.S securities law.
This may be why he considers Ethereum which used to be a proof-of-work cryptocurrency to be a security, now that it has transitioned to proof-off-stake. Although this remains debatable, New York attorney general last week filed a lawsuit against KuCoin for trading Ethereum which she referred to as an unregistered security, same as LUNA and TerraUSD
Is Bitcoin the Only Commodity
If Gensler goes through with with enforcement that proof-of-stake tokens are securities, that may leave Bitcoin as the only cryptocurrency that has not been regarded as a security in the U.S. Meanwhile, there’s no conclusion yet but there may be one soon.