A prominent position has been occupied by Ethereum among the most-discussed crypto tokens during some of the previous weeks. This has been due to the happening of well-known updates such as the Merge. In addition to that, the transition of the network to PoS has played an important role in escalating the rumours that ETH (the native token of the network) is classified under the security class.
U.S. Securities Regulator Says the Authorities Have Jurisdiction over the Crypto Network Ethereum
At present, to fortify the argument to a further extent, a lawsuit has been filed on the behalf of the Securities and Exchange Commission of the United States against Ian Balina (a famous crypto influencer). The securities regulator has claimed that the transfers made in ETH by default come under the jurisdiction of the U.S. because a broader proportion of the nodes (validators) of the network are operating within the country.
The lawsuit was submitted against Balina as he allegedly provided unregistered tokens. The person was troubled following he remained unsuccessful in registering the project run by it as security in 2018 in advance of launching its initial coin offering (ICO). The respective crypto influencer immediately refuted the respective assertions. Nonetheless, presently, the community is pondering over the massive statement that the securities regulator has made in the legal case thereof.
As per the filing’s sixty-ninth paragraph, the case mentioned that the agency had reserved the right to prosecute Balina due to the jurisdiction of the SEC over the network of Ethereum. The watchdog emphasized that the network validated the ETH contributions of the U.S. investors present in the pool of Balina. As per the regulator, Ethereum Network’s nodes are more thickly present within the U.S. thus the government of the country has jurisdiction over Ethereum.
As per the reports, several of the investors based in the U.S. jurisdiction the participants of the investment pool that was curated by Balina. A network of blockchain nodes of Ethereum additionally verified many ETH contributions. As a result of this, the regulatory agency specified that a group of the validators of Ethereum within the United States provided the services of authorizing the transfers and that those transactions occurred in the United States.
Apart from that, a noteworthy thing is that nearly 42.56% (nearly 3340 out of the cumulative 7819) nodes of Ethereum are working from within the U.S. territory. During the time after Ethereum’s Merge, the network has been subjected to a heightened level of resistance from regulatory bodies.
SEC’s Claims May Damage Ethereum Network Severely
As formerly reported, a few were proposing that Ethereum would come under the purview of the Securities and Exchange Commission following the respective upgrade, as Ethereum (ETH) tokens would be counted as security. On the contrary, some others were of the view that it would become more centralized. The SEC’s new statement would be highly damaging for the network, although many legal experts asserted that there would be no legal importance of the phrasing of the complaint.