Chairman of the SEC Gary Gensler suggested that tokens on the Proof-of-Stake (PoS) consensus algorithm could be considered securities under U.S. law, The Block reports.
“Investors expect profits from these tokens, whether PoS assets where they anticipate returns of 2%, 4% or 18%. Regardless of what is promoted or staked in the protocol, they lock coins in it,” said Gensler.
According to the head of the agency, such protocols are often developed by a small group of entrepreneurs and developers. Gensler believes that all such token operators should comply with regulatory norms. The same applies to intermediaries, he added.
His comments followed questions from journalists about the recent remarks by the chairman of the CFTC, Rostin Behnam. Behnam confirmed that he and the agency he leads classify Ethereum as a commodity.
In February, Gensler hinted at the possibility of recognizing all cryptocurrencies, except Bitcoin, as securities. His position drew criticism from lawyers in the industry.
In September 2022, during a Senate hearing, he allowed that digital assets on PoS could receive such a classification after passing the Howey test.
In 2023, the Commission took the first enforcement actions against staking products. The Kraken exchange, as a result, settled the charges with the SEC, agreeing to shut down the relevant program and pay $30 million in penalties.