Ether Proof-of-Stake Could be Classified as a Security

[Robert518]

The wait for the Ethereum transition to proof of stake is finally over after the successful merge on Thursday, an event that led to Ether attracting the US Securities and Exchange Commission.

According to a recent report by the Wall Street Journal, SEC chairman, Gary Gensler has hinted about Ether, which according to him, the recent transition to proof-of-stake could be enough reason to push Ether out of its current legislation and make it security.

As Ether has completed its transition to PoS, staking, which has the staker make his own tokens unavailable to himself for a period of time in exchange for a return on investment, could be seen as a “reasonable expectation of profit.”

Meanwhile, SEC and Commodity Futures Trading Commission (CFTC) had previously said they didn’t recognize Ether as security with both commissions agreeing that Ether acted more like a commodity.

Full News: https://mycryptoparadise.com/ether-could-be-registered-as-a-security-sec-chairman/

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[BADecker]

In the US, the US has the right to classify anything however they legally like.

PoW, because it doesn't clearly show who the traders are, is a private operation.

Because you might be able to figure out who the traders are in PoS, it might fall under some US heading.

But the way to get out of almost all the US regulation is, build into every client or core client, that the use of this client or app is private. Literally place a privacy agreement and notice into the client, that you have to pass through to use the client.

If you want to do a deal in cash, and the other dealer is right with you, and you do it privately, it isn't public. It doesn't fall under public laws. To make it clear that it is private, sign a proper contract/agreement to that effect. But at least, regarding crypto, have the statement built into the client or app, that every usage is private between the controllers of the particular addresses involved.

Why is this protection from government? For the same reason that what you do in your bedroom is private. Government sometimes gets away with invading your privacy, but it's because you don't know how to defend it in court.

Art I, S 10, C 1.5 in the US Constitution is known as the "Contract Clause." The part that we are concerned with is this: "No State shall ... pass any ... Law impairing the Obligation of Contracts..." "State" includes the US government. If you have a contract built right into the client, you have exercised a contract right there, and there are only a few ways government can legally get around your privacy. But, if you don't fight it properly, government can do anything they want.

Contact an attorney before you try to use any of this. And be careful when you sign up as a 'client' of an attorney... because this throws you into having limited rights in court. The judge is the attorney's boss, and he might not agree with the attorney, or with you.



EDIT: Search in DuckDuckGo and Youtube on 'Private Membership Association'.

[franky1]

bitcoin2009-~2014 was not considered a currency by US government

it was like pokemon cards or other collectables.. thus fell under property law as it had the features of ownership and transfer of ownership
thus bitcoin had a right to privacy under property law that institutions could not break.

however when bitcoin became recognised by governments as a currency, this changed things. the property privacy protection was revoked and instead replaced with financial privacy protection under the bank secrecy act. by which banks and institutions can monitor log and request reasons of use and seek to look/request info about source and destination when they custodian'ed their customers value and part of that is to report any suspicious activity(in short AML/KYC applied)

there is no deep property privacy protection now its a currency
(property privacy laws/protections are different rules to financial privacy laws/protections)

currency is a umbrella term which many things fall into sub classifications, such as assets, commodity, stocks, shares, etc

bitcoins subcategory was considered an asset classification.

bitcoin was not a commodity because bitcoin was not used to then create other products(sidechain/subnet tokens, microunits of exchange).

however now that bitcoin is becoming more of a mainnet to then lock up coin to then create pegged tokens/microunits. the us gov is trying to sway favour to classify bitcoin as a commodity when it is locked to then have value used on sidenetworks and subnetworks (binance(btcb), liquid(lbtc), LN(msat))
where the locked btc becomes the commodity and the subnetwork token then becomes a new classification dependant on utility

ethereum has been a mainnet for sidechains and subnets for a whiles so already considered a commodity for a while.
where for instance eth locked/pegged NFT are deemed as property class

as for ethPoS when locked up as "stake" yes that can be classified as a security(equity securities)

but here is the thing
when classified as a property. financial regulators cannot regulate it. meaning they cannot enforce rules on businesses or people that create or use it.

as a currency then the regulators (SEC or CFTC or FATF) can interfere. however depending on the classification, defines which regulator applies and thus what remit their interference then applies

as a asset currency, like securities. thats the SEC
for commodities, thats the CFTC

both under the currency umbrella regulator FATF

with assets. the SEC cannot do things like apply quota's to limit what a business can produce or sell or handle as that impedes the business and businesses can sue.

however a commodity the CFTC can impose production quota's and regulations that production should not cause environmental harm.. EG farming quota and environmental inspections.

so with eth as a commodity is was pressurised to shift to PoS or have regulated exchanges and merchants be told to not service/accept/maintain or use a commodity that is in breach of commodity regulations.
yep regulators pushed exchanges to push devs to make eth PoS else having to de-list eth off of exchange orderbooks

with certain groups trying to push bitcoin in "offramping" users away from bitcoins mainnet to utilise sidechains and subnets as "solutions" to bitcoin scaling(facepalm) its now pushing bitcoin into the commodity category more.

which can later push exchanges into having to make the choice. use their economic node presence a power to push devs to transition to PoS or have to de-list BTC

so lets not let certain groups lobby government to classify bitcoin as a commodity. because the CFTC will regulate exchanges to get bitcoin to shift to PoS or have exchanges delist bitcoin