Ethereum is a smart contract platform that enables developers to build tokens and decentralized applications (dapps). ETH is the native currency for the Ethereum platform and also works as the transaction fees to miners on the Ethereum network. Ethereum is the pioneer for blockchain based smart contracts.
The lawyers of the SEC made controversial statements in a court case involving the alleged sale of securities through a ICO. Although the remark may seem out of place, the current situation of the network of Ethereum a decentralized open-source blockchain with smart contracts functionality. opens up the possibility of certain regulatory risks.
- SEC suggests that transactions in Ethereum should be considered under its jurisdiction
- They justify that the largest number of nodes are in the USA.
- The accusations demonstrate ignorance and arbitrary nature of the SEC
- Ethereum’s current situation presents certain risks for decentralization the handover of control from a central authority to several different custodians.
La U.S. Securities and Exchange businesses that allow customers to trade cryptocurrencies for fiat money or other cryptocurrencies. Commission (SEC) the main U.S. regulator in matters pertaining to this market, made some pretty bold remarks about the transactions taking place in Ethereum, making sure that all of the above Blockchain a distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies. should be considered as “made on US territory”, since the US has the largest number of nodes supporting the network.
These bold statements came as a result of a lawsuit presented today against a popular youtuber named Ian Balina, who is accused of receiving earnings not properly reported to the agency for promoting a crypto project known as Sparkster, which operated a proprietary token a digital unit designed with utility in mind, providing access and use of a larger crypto economic system. called SPRK.
The case against Sparkster y Balina
As for Balina, the SEC assured that Sparkster marketed its token SPRK through an ICO campaign in mid-2018, this being an ERC-20 tokens designed and used solely on the Ethereum platform. asset built on the network of Ethereum.
The complaint came to the regulator because the project has not presented any product and the community filed a class action lawsuit that even backed the youtuber, given that the company responsible raised more than USD $30 million from investors residing within the US.
According to the SEC, Balina had made a profit by selling some SPRK tokens through his investment group on Telegram at the time, where he had them delivered directly to interested parties capturing the associated profits.
An unprecedented signal signals are a call to action to either buy or sell an asset.
Although this type of denunciation is very common nowadays on the part of the SEC, the comment that generated some bewilderment among enthusiasts and analysts had to do with considering transactions through Ethereum as if they were all taking place on U.S. soil.
In this regard, the lawyers of the SEC indicated in the court filing that Ethereum should be considered as originating in the US given that, according to the agency’s calculations, the largest number of nodes in the network were clustered within the US at the time of the Sparkster began operations:
“At the time, ETH contributions [by SPRK investors] were validated by a network a network refers to all nodes in the operation of a blockchain at any given moment in time. of nodes on the Ethereum Blockchain, which are more densely clustered in the U.S. than in any other country. As a result, those transactions took place in the US.”
While at that time it is not possible to determine with certainty how many nodes were in the U.S., current calculations made byethernodes.orgreflect that 42.33% of those currently operating are in the North American nation, leaving 11.6% in Germany, 4.55% in Singapore, another 4.54% in France and the rest in other countries.
A very dangerous precedent
Recently the SEC has been at the center of public opinion after making rather arbitrary remarks regarding cryptocurrencies:
- In a case against a former Coinbase, la SEC qualified several cryptocurrencies listed and traded on the exchange as securities. For this reason it raised an investigation against this and other platforms operating in the US.
- The president of the SEC, Gary Gensler, ratified that most cryptocurrencies could perfectly qualify as securities under current laws, taking the controversy even further by defending this legal framework today despite the fact that it dates back to 1930.
- During his presentation to the U.S. Senate Gensler pointed out that cryptocurrencies based on a consensus algorithm. PoS could also qualify as securities.
While the agency has not endorsed these or the assertions made in the Balina case, one of the criticisms many analysts pointed to the change change — a concept relevant to cryptocurrencies that use the UTXO model — is the number of coins sent back to a user after they use their unspent outputs to initiate a transaction. in the network’s consensus consensus is achieved when all participants of the network agree on the order and content of the blocks in the blockchain. algorithm a process or set of rules to be followed in problem-solving or calculation operations, usually by a computer. is that it is not a “consensus algorithm”. Ethereum is that it would become much more centralized, given that the largest node the most basic unit of blockchain infrastructure that stores data. operators are mainly exchanges offering their services in the US. This opens the door for governments to put pressure on these entities, and thus engage in acts of control and censorship censorship is the act of altering, suppressing, or prohibiting speech or writing that is considered detrimental to the general public. to satisfy government interests.
Now that the network operates under PoS, the most recent estimates indicate that the exchanges Binance, Coinbase is an American company that operates a cryptocurrency exchange platform. y Kraken are listed as the top three validators.
- The Merge draws SEC’s attention in the US: PoS cryptocurrencies could be ‘securities’
- SEC chairman reiterates that most cryptocurrencies in circulation should qualify as securities
- SEC enforcement director says more action coming against companies in the crypto space
Article by Angel Di Matteo / DiarioBitcoin
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