Gary Gensler once again passed a comment over the nature of Proof-of-stake (PoS) cryptocurrencies and indirectly suggested crypto token issuers get registered with the corresponding body.
Gary Gensler is chairman of the United States Securities and Exchange Commission (SEC). Gensler also has a past, where he passed many statements in favour of Bitcoin & blockchain technology but after joining the SEC agency in 2021 he started to show his negative stance over the crypto sector. Under his leadership, the SEC agency sued many crypto companies over their corresponding nature of crypto services.
On 15 March 2023, During an open meeting of the SEC, the SEC chairman said that all the Proof-of-stake (PoS) crypto assets can be considered as security because holders of PoS tokens expect to get a return.
“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 Chairman said.
Further, Gensler pointed out the different strategies used by the crypto entrepreneurs & companies to change the definition of PoS token holding returns e.g Defi protocols, fund locking, liquidity, staking pools, etc.
The latest comments passed by the SEC Chairman is a type of contradiction over the statement passed by the Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam.
Rostin said that the PoS cryptocurrency “Ethereum” security & should be regulated by the CFTC agency. These things are showing that both the sister regulatory agencies are in conflict with their point of view over the nature of crypto assets.
In Feb 2023, The US SEC fined the Kraken Crypto exchange over crypto staking services. The SEC body claimed that Kraken’s crypto staking services were against the Federal Securities law. In that settlement, Kraken paid a $30 million fine & also suspended crypto staking services for the US-based crypto Investors.