The SEC chairman was speaking to the media impromptu following a commission meeting when he was questioned about a comment made by the CFTC chair. Gary Gensler, the United States Securities and Exchange Commission chairman, stated that proof-of-stake coins might constitute securities. He made his remarks on March 15 during a commission meeting on cybersecurity problems.
Reporters questioned Gensler about his reaction to Commodities Futures Trading Commission Chair Rostin Behnam’s comments at a Senate Agriculture Committee hearing last week that stablecoin and Ether were “going to be commodities.” As The Block reported, Gensler responded.
“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.”
“Anything they’re supporting and putting into a system, and locking up their tokens in a protocol, which is frequently developed by a tiny number of entrepreneurs and engineers,” he said.
Gensler has already expressed his thoughts on proof-of-stake currencies. Following the Ethereum Merge in September, Gensler stated that proof-of-stake currency holders were “the investing public anticipating returns based on the efforts of others.”
🗓️ Open Commission Meeting 🗓️— Gary Gensler (@GaryGensler) March 14, 2023
Tomorrow, March 15th, at 10am ET we will have an @SECGov open meeting to discuss:
📜Proposed changes to Regulation S-P
📜A Proposed Cybersecurity Risk Management Rule
📜Proposed changes to Regulation SCI
That month, Gensler testified before the Senate Banking Committee, saying that staking is “another indicator that, under the Howey test, the investing public is anticipating benefits based on the work of others.”
The Howey test, which goes back to 1946, is used to identify securities under US law.
Earlier this year, the SEC ordered bitcoin exchange Kraken to halt its staking service and pay a $30 million settlement on February 9, raising worries that the agency was planning a new round of cryptocurrency enforcement proceedings. “If they want to offer to the stake, we’re neutral,” Gensler said. Come in and register because investors require that information.”