CFTC Chairman Heath Tarbert has said that his entity is investigating Ethereum. Tarbert and other scientists carefully studied the inner processes of the Ethereum blockchain. Appears that the network will soon start changing itself to become a PoS-based system. Not only the miners but also the stakers will secure the transactions and blocks. On October 10, 2019, Tarbert concluded that Ethereum 2.0 tokens are likely to become virtual securities. Per Heath:
“It is my view as chairman of the CFTC that ether is a commodity.”
The SEC‘s Division of Corporate Finance head William Hinman said that Ether is not a commodity:
“Based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions”
Some articles claim that Ethereum Foundation hides from U.S. laws and taxes. Indeed, the Foundation is working in Switzerland as a nonprofit. But the Attorney Grant Gulovsen thinks that the U.S. lawmakers can list Ethereum as Commodity and start investigating into what has happened in the field in recent years.
He thinks that the SEC may decide that a new PoS validation system of Ethereum turns the coins into an investment asset. The Bitcoin industry may experience a shocking blast, as well as the Ethereum ecosystem.
Ethereum 2.0 PoS Model Can Change the Securities Law?
If you want to find out whether something is classified as the security, look into the statutory definition. It is there, in the Securities Act from 1933 and the Securities Exchange Act from 1934. To regulate investments, Congress created laws with blurry definitions of security: it is something that you can sell as an investment.
The term ‘investment contract’ is present in every security definition. The SEC and one of the District Courts have stated: the definition of the virtual deal depends on whether the asset fits ‘investment contract’ term. Considering the fact of the high popularity of smart…