Uh-oh, the SEC Has Stealthily Negated Its Own Chief on Ethereum’s Status as a Security
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In the aftermath of FTX's spectacular fall from grace, the Securities and Exchange Commission (SEC) in the US has amped up its scrutiny of the entire crypto sector, and rightfully so. However, instead of providing clear-cut regulatory clarity, the apex financial regulator has opted for deliberate policy ambivalence as a cudgel to pummel crypto sector bigwigs, including Ethereum. More troubling still, the SEC's chair, Gary Gensler, is now issuing public statements that directly contradict the agency's position enunciated in the courts.
Recently, the SEC forced Kraken exchange to shutter its crypto staking program by alleging that the firm was dealing with "unregistered securities." With a vast segment of the crypto sphere having turned toward the staking model as a viable transaction authentication mechanism, including Ethereum, the negative ramifications of such an interpretation from the SEC are obvious.
This week the NYDFS ordered US-based Paxos to stop issuing US dollar-denominated stablecoin BUSD and the SEC issued a Wells notice to Paxos. We don’t know what aspects of BUSD might be of interest to the SEC. What we do know: stablecoins are not securities
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