Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), has restated his claim that his organisation could regulate proof-of-stake tokens under the Howey Test.
Gensler told reporters on Wednesday that such tokens could spark securities regulations as investors expected returns after purchasing tokens backed by proof-of-stake mechanisms.
He said as quoted by The Block: “Whatever they’re promoting and putting into a protocol, and locking up their tokens in a protocol, a protocol that’s often a small group of entrepreneurs and developers are developing, I would just suggest that each of these token operators … seek to come into compliance, and the same with the intermediaries”
The comments contradict statements from Rostin Behnam, Commodity Futures Trading Commission (CFTC) chairman, who revealed last week that his agency should regulate Ether (ETH) as a commodity rather than a security.
Gensler, the SEC, and other US regulators have launched an industry-wide crackdown on cryptocurrencies in recent months, including Paxos, Ripple, CoinEx, and Kraken.
The news comes after New York Attorney General Leticia James sued crypto exchange platform KuCoin, where she alleged the latter had sold unregistered US securities in New York.
