The Wall Street JournalThe Wall Street Journal

Ether’s new ‘Staking’ model could draw SEC attention

By Paul Kiernan and Vicky Ge Huang

15 Sep 2022 · 3 min read

According to US SEC Chairman, Gary Gensler, Ethereum's switch to proof-of-stake consensus mechanism may have turned Ether into a security which means more future regulations in the offing.

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Ethereum’s big software update on Thursday may have turned the second-largest cryptocurrency into a security in the eyes of a top U.S. regulator.

Securities and Exchange Commission Chairman Gary Gensler said Thursday that cryptocurrencies and intermediaries that allow holders to “stake” their coins might pass a key test used by courts to determine whether an asset is a security. Known as the Howey test, it examines whether investors expect to earn a return from the work of third parties.

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