Gensler Sticks to His Guns: Proof-of-Stake Tokens Could Be Securities – Ethereum in Trouble?
cryptonews.comSecurities and Exchange Commission Chair Gary Gensler has once again indicated that tokens using staking protocols could be considered securities under US law.
During an open meeting of the SEC on Wednesday, Gensler reportedly said that Proof-of-Stake (PoS) tokens can be considered securities because investors anticipate a return when they purchase them. "The investing public is investing anticipating a return, anticipating something on these tokens, whether they're proof-of-stake tokens, where they're also looking to get returns on those proof-of-stake tokens and getting 2%, 4%, 18% returns," the SEC Chair said.
Proof-of-stake is a cryptocurrency consensus mechanism for processing transactions and creating new blocks in a blockchain. The system works by selecting validators, who stake stake a certain amount of crypto, in proportion to their quantity of holdings in the associated cryptocurrency.
A number of major cryptocurrencies, including Ethereum, the second-largest crypto in terms of market cap, use the PoS consensus mechanism.
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