This Serious Ethereum Warning Causing a Major ETH Price Crash, Fed Says

Ethereum, the second largest cryptocurrency after bitcoin, underwent a major update this week, which some believe could affect the price of ethereum.

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Ethereum price crashed this week after surging ahead of its long-awaited upgrade as the cryptocurrency market braced for a possible “black swan”.

Today, United States Securities Commission (SEC) Chairman Gary Gensler warned that the Ethereum upgrade could mean the cryptocurrency becomes regulated as a security, which would worsen the sale of ethereum price.

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Securities and Exchange Commission (SEC) Chairman Gary Gensler has warned against proof-of-stake… [+] cryptocurrencies like ethereum.

Ethereum’s transition to proof-of-stake, which allows ethereum holders to lock up their coins to receive a return, could prompt the U.S. Securities and Exchange Commission (SEC) to take a closer look at regulation of ethereum as a security, SEC Chairman Gary Gensler said following a Senate Banking Committee hearing, according to the Wall Street Journal.

The upgrade, completed on Thursday after years of preparation, means the Ethereum network is secure and transactions are confirmed by Ethereum holders who “stake” their coins instead of relying on “miners”. Ethereum’s transition to proof-of-stake could reduce carbon emissions from the blockchain network by 99%, according to the Ethereum Foundation.

“From the point of view of the room […]this is another clue that, according to the Howey test, the investing public anticipates profits based on the efforts of others,” Gensler reportedly said, adding that he was not referring to a specific cryptocurrency.

According to the Howey test, a security is defined as an “investment of money in a common enterprise with a reasonable expectation of profit from the efforts of others”. Securities are then subject to disclosure and registration requirements.

In a swipe at Coinbase and other crypto exchanges, Gensler said any crypto exchange offering staking services to users is “a lot like – with some labeling changes – lending. »

Ethereum price crashed this week after surging near its main… [+] Upgrade.

Gensler also reiterated his view that almost all cryptocurrencies are securities, once again calling on crypto companies to register with the SEC.

“Of the nearly 10,000 tokens in the crypto market, I believe the vast majority are securities. Bids and sales of these thousands of cryptocurrency tokens are covered by securities laws, which require these transactions to be recorded or made under an available exemption,” Gensler said in prepared remarks. “So, I have instructed SEC staff to work directly with entrepreneurs to have their tokens registered and regulated, where appropriate, like securities. »

Last week, the White House Office of Science and Technology warned that bitcoin, which uses the energy-intensive “proof-of-work” consensus mechanism, could be banned in the United States due to its very high carbon footprint.

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This Serious Ethereum Warning Causing a Major ETH Price Crash, Fed Says

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