Gary Gensler, Chair of Securities and Exchange Commission, suggested that regulators might be more interested in Ethereum after The Merge. Gensler stated that exchanges offering staking services to users are “very similar” in concept to lending.
Chair Gary Gensler suggested that Ethereum’s shift to proof of work from proof of stake could cause the Securities and Exchange Commission (SEC) to reexamine the regulation of cryptocurrency as security.
Gary Gensler mentions The Howey Test
This is a tool regulators use in determining whether an asset or security is secure.
According to The Wall Street Journal, Gensler stated that “from the coin’s viewpoint…that’s another indicator that under the Howey testing, the investing public anticipates profits based upon the efforts of others.” Gensler clarified that he wasn’t referring to any specific cryptocurrency.
Gensler was present before the Senate Banking Committee to attend a regular SEC oversight hearing. Gensler also stated that he believes that a crypto-exchange offering customers staking services “looks very similar-with some modifications of labeling-to lending.”