In the midst of the SVB meltdown, the following Coinbase’s Wells notice as well as CFTC suing Binance and its founder, the fact that the New York Attorney General called Ether a security — in a lawsuit against crypto exchange KuCoin — had almost gone unnoticed.
This statement has far-reaching implications for most cryptocurrencies, crypto exchanges that list them, and the health of the crypto market as a whole!
Since the very day of the Ethereum Merge, the Securities and Exchange Commission (SEC) forewarned: ETH, from now on, meets the criteria of a security.
Therefore, it was only a matter of time before the debate over whether ETH was a security or not was brought to court.
That’s exactly what happened on March 9th, 2023.
In the lawsuit, the NYAG did not hesitate to lump ponzinomic LUNA/TerraUSD (UST) with ETH.This is a clear indication that Ethereum, widely regarded as the most “respected” entity in web3, will be made an example and a warning for all.
Today, we will explore why Ethereum is on its way to becoming a security and what is at stake, namely the statute of POS consensus-based cryptocurrencies as a whole!
Heavily influenced by President Joe Biden’s 2022 agenda to bring order to the crypto ecosystem, the work on the U.S. regulatory and supervisory framework focused on three main axes: litigation, new laws and “securities”.
In the U.S., stocks and other securities are regulated by the SEC. In its effort to rein in the crypto market, the SEC attempted in 2022 to offer a response to this crucial question: Are cryptocurrencies securities?
According to SEC Chair Gary Gensler, there is only one possible response to this question:
“The law is clear. I believe, based on the facts and circumstances, most of these tokens are securities.”
According to the 1946 Supreme Court ruling in the SEC v. W.J. Howey Co., under…
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