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The chairman of the United States Securities and Exchange Commission (SEC) stated that cryptocurrencies or intermediaries that allow users to “stake” their coins have the potential to pass the Howey test to be a security.
Staking “turns” crypto into securities?
As previously stated, Gary Gensler – Chairman of the US Securities and Exchange Commission (SEC) believes that staking is a form of investment that expects profits to be generated through the efforts of others (factors 3 & 4). in the Howey test). This is the view of the leader during a congressional hearing, emphasizing that he is not referring to any single cryptocurrency.
According to Gensler, staking provided by a third party is seen as a lending model. The SEC has not stopped ordering crypto-lending institutions to register with them for the past 1 year. The agency bluntly fined lending platform BlockFi $100 million in February of this year for failing to fulfill this obligation.
Cryptocurrency is no longer just an investor’s “playground”
Comments from the Wall Street Journal, now, cryptocurrencies are no longer just a race for investors, but also with the participation of regulatory authorities eager to impose on the market.
Cryptocurrency regulation is currently a work in the gray area between the purview of the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
At the beginning of August, the CFTC – a “close friend” of the SEC – was assigned to manage Coinbase and FTX. This shows that cryptocurrencies like Bitcoin and Ethereum are more of a commodity than a security.
However, in the interest of consumers, the CFTC is still facing a lack of resources and experience to track and manage investors in the crypto market. Compared to the SEC, the CFTC team is still “thin” and the markets under its management are currently mainly institutional investors, typically companies, hedge funds, or banks, but not banks. small investors or are “trying to save for old age”. However, Rostin Behnam, President of the CFTC said that there will be no direct interaction with retail investors. Instead, they will work with the American Futures Traders Association and state leaders to ensure that these companies and investors are always in compliance.
The CFTC president said that $112 million is the amount of money that the CFTC will need in the first three years of managing the cryptocurrency market for law-making, recruitment, personnel training and a number of other purposes. This amount is collected from cryptocurrency companies as a form of user fees.
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