The Securities and Exchange Commission (SEC) is now insinuating that Ethereum’s transition from proof-of-work (PoW) to proof-of-stake (PoS) consensus mechanism turns it into a security, specifically an investment contract. This implication has progressed from a mere suggestion and is now leading to various legal actions. Gary Gensler, an advocate for the regulation of cryptocurrencies, contends that cryptocurrencies enabling staking also fulfill the requirements of the Howey test, and therefore, should fall under the SEC’s jurisdiction and scrutiny. However, the circumstances differ for PoW assets such as Litecoin (LTC), Dogecoin (DOGE), and Bitcoin (BTC).
