Suggesting the possibility staking of cryptocurrencies could pass the Howey test, which is used to determine whether an asset is a security. This was stated during a Senate hearing by the chair of the SEC Gary Gensler.
Hearings followed the activation of The Merge upgrade on the Ethereum mainnet.
«This is another criterion of the Howey test — the public expects profits to come from the efforts of others. If an intermediary offers clients staking services, it closely resembles … lending»,
Gensler explained that he did not mean any specific cryptocurrency.
During the hearings, Senator Pat Toomey criticized Gensler for the view that almost all traded cryptocurrencies are likely unregistered securities. He also expressed dissatisfaction with the SEC’s role in setting rules for digital assets.
«The problem is that the Commission does not share with us the framework it uses», — the legislator explained.
In Toomey’s view, Congress may need to intervene and set clear boundaries for investors and entrepreneurs. The SEC, he said, should provide “far more clarity”. It could have prevented the collapses of firms such as Celsius Network and Voyager Digital.
In response, Gensler countered that many firms should begin engaging with the SEC. He added that there should be a standing policing presence in the industry.
Forbes reports that the agency has begun investigating the activities of every Bitcoin exchange in the United States, including Coinbase.
Earlier, Gensler said about developing ways to register digital assets as investment contracts and intensifying efforts to authorize crypto trading platforms. In May, the official warned of possible prosecution of unregistered bitcoin exchanges.
In July, a group of senators introduced the Consumer Digital Goods Protection Act. It requires firms offering trading of digital assets to register with the CFTC.
Later, the regulator announced the creation of the Office of Technology Innovations, which will regulate the industry.
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