The Securities and Exchange Commission (SEC) has started to suggest that Ethereum’s transition from proof-of-work (PoW) to proof-of-stake (PoS) consensus mechanism changes its classification to a security, specifically an investment contract. This insinuation has now progressed from a mere hint to concrete legal actions being pursued. Gary Gensler asserts that cryptocurrencies that enable staking also meet the criteria outlined in the Howey test, and therefore should fall under the SEC’s jurisdiction and oversight. Nevertheless, the circumstances differ for PoW assets such as Litecoin (LTC), Dogecoin (DOGE), and Bitcoin (BTC).
