It was a tremendous relief for the team behind the implementation of Ethereum Merge. Finally, after a long time, the implementation of the Merge has been put in place, which went flawlessly.
The overall process of the implementation of Merge involved multiple processes and tests. Finally, after all necessary checks and testing were executed, the upgrade was implemented.
Securities Law May Kick In
Following the implementation of the Merge, the entire ETH community is rejoicing that everything went smoothly. However, there is one major fear and concern that is lurking in the shadows for ETH’s PoS consensus.
After the implementation of the Merge, the Ethereum PoS protocol may have come under extensive monitoring by the securities regulator.
In the United States, it is the Securities and Exchange Commission (SEC) that monitors the operational activities of cryptocurrency firms and protocols.
Gary Gensler talked about Crypto Staking Protocols
On Thursday, Gary Gensler, the SEC chairman talked about the staking protocols that are operating in the cryptocurrency industry. He also included the intermediaries as part of the cryptocurrency industry and pointed out how the SEC will perceive them.
He added that the SEC would consider such entities that allow the investors and holders to proceed with staking their cryptocurrencies for returns would be defined as securities.
He stated that their existence will be defined under the Howey test as security. Gensler made these comments during the Senate Banking Committee.
Gansler’s Statement Coincided with Merge Implementation
Gansler made a statement about the staking protocols just when the Merge was implemented on September 15.
According to many experts, Gansler’s statement about the staking protocols was an indication that the SEC has its eyes set on the PoS protocols.
As the Merge has been put into place, things may become quite tricky for the ETH PoS. The SEC may start paying close attention to the PoS consensus protocol of Ethereum.
ETHs moved from PoW to PoS
Now that the Ethereum network has moved to PoS, it will no longer depend on the proof of work mining consensus. The particular mining protocol required a tremendous amount of energy.
By switching to the PoS protocol, the validators will have the opportunity of creating new blocks and verify transactions through staking.
Ethereum to Come under SEC’s Microscope
In the past, the Securities and Exchange had not classified Ether as securities. Therefore, it was under the CFTC, which is the regulator for commodity futures.
The SEC does not let any unregistered security operate in the United States without approval. In the past, the SEC has filed a lawsuit against Ripple Labs for offering XRP, which the regulator claims the company did without their approval.
If the SEC classifies ETH in the same security, it may face the same situation as Ripple.