Gary Gensler, the chairman of the Securities and Exchange Commission, hinted to reporters on Wednesday that tokens that use staking procedures may be regarded as securities under US law.
"The investing public is investing anticipating a return, anticipating something on these tokens, whether they're proof-of-stake tokens, where they're also looking to get returns on those proof-of-stake tokens and getting 2%, 4%, 18% returns,"
he continued:
"whatever they're promoting and putting into a protocol, and locking up their tokens in a protocol, a protocol that's often a small group of entrepreneurs and developers are developing, I would just suggest that each of these token operators seek to come into compliance, and the same with the intermediaries."
In response to questions on Rostin Behnam, chair of the Commodities Futures Trading Commission, who restated his own and his organization's belief that ether is a commodity last week, Gensler made the comments.
As the commission approved three proposed regulations to strengthen cybersecurity, customer privacy, and system requirements for the securities sector, including at some businesses dealing in digital assets, Gensler addressed the media.
Gensler previously stated that proof-of-stake methods may be governed by US securities rules, but he went into further detail on Wednesday. Meanwhile, last month, the SEC reached a settlement with Kraken after launching its first enforcement case using staking as a service.
As part of an enforcement complaint brought against cryptocurrency company KuCoin, New York Attorney General Letitia James has independently contended that ether is an unregistered security and that its developers, including Vitalik Buterin, are in violation of U.S. securities law.
