SEC’s Gensler Reiterates ‘Proof-of-Stake’ Crypto Tokens May Be Securities
- Focus is on coins promoted by creators, offering returns
- Comment comes as regulators intensify scrutiny of staking
Gary Gensler
Photographer: Al Drago/BloombergThis article is for subscribers only.
US Securities and Exchange Commission Chair Gary Gensler suggested once again that so-called proof-of-stake tokens, which represent many major cryptocurrencies, should be regulated as securities.
“Proof-of-stake” describes the process that is used to run blockchains including No. 2 crypto network Ethereum, in which coin holders can earn financial rewards by allowing some of their tokens to be used in ordering transactions. Creators of protocols that underpin such tokens often promote their projects on social media, and investors flock to them based on the expectation of earning a return, according to Gensler.