Ethereum Price Drops Over 20% After US Regulator SEC It is trying to declare victory over the Ethereum network, although initially the network successfully switched its mechanics to POS last week.
Most recently, the Ethereum network was declared under the jurisdiction of the US government. and the Securities and Exchange Commission, as most of the network security validator nodes are based in the United States.
After such news began to spread out. This resulted in the price of ethereum dropping 20% to $1,364 at the time of the report.
However, the latest comment from Gary Gensler The head of the SEC has also further shaken investor confidence in the Ethereum network.
As reported by the Wall Street Journal on Thursday, office head The SEC cited the Ethereum network’s award-taking process, adding that such assets qualify as securities under the Howey Test, even though the currency itself is not identified. digital or any specific network.”
After Ethereum has switched to Proof of Stake, the network has indeed reduced its energy consumption for transaction validation. In addition, investors can also take their own ETH tokens to stake as a secure node. the validity of the transactions on the network And also get reward from stake as well.
Profiting from by taking coins to stake caught the attention of Gensler and made crypto investors worried about tying Ethereum in the future as a security.
Additionally, the SEC filed a lawsuit against ‘Ian Balina’ Crypto influencer on Monday. on the charge of not registering securities Ahead of the ICO in 2018, there were hints that the Ethereum network was under the jurisdiction of the US government.
According to the SEC, the ETH sent to Balina in 2018 was “more censored by the Ethereum blockchain-based network of nodes in the United States than in any other country. Those transactions take place in the United States and may fall within the jurisdiction of securities law.”
However, if the Ethereum network is classified as a security This will require Ethereum and any applications that use it to go through a lengthy registration process with the SEC.
And if ETH is seen as a security That means Ethereum has been trading unregistered securities for years. This could lead to a lawsuit against the Ethereum Foundation, a large number of exchanges that allow trading of Ethereum and most ERC-20 coins to follow.