Some experts object to the US SEC’s claims that it has jurisdiction over Ethereum trading because there are more ETH nodes in the country than others.
SEC claims jurisdiction over ETH trading
In its complaint against crypto promoter Ian Ballina, the SEC said several U.S.-based investors participated in an investment pool verified by Ethereum network nodes.
The regulator claimed the transactions were domestic because these nodes are “more densely clustered in the United States than in any other country.”
The SEC’s claim of jurisdiction sets dangerous priorities for the cryptocurrency industry. Because the node-dense assets in the US may face this overkill in the future.
According to Ethernode dataabout 43% of Ethereum validator nodes are operated from the United States, followed by Germany at 12%.
Now that concerns about censorship have surfaced, the U.S. regulator, which has jurisdiction over Ethereum itself, could make it even easier to censor the network directly, in addition to putting pressure on validators.
Experts disagree with SEC
Meanwhile, several crypto pundits have questioned the SEC’s claim of jurisdiction over Ethereum.
Adams Cochran, adjunct professor and partner at Cinneamhain Ventures, said the SEC had a perfect case, but decided to set a precedent and use it to bring all cryptocurrencies under its jurisdiction. said.
“This is absolutely unacceptable excess and must be aggressively pushed back.”
Dylan LeClair of UTXO Management said the claim would have “very ugly implications” if it set a precedent.
Amazing – Quiet shocking statements from the SEC in a new lawsuit against the sale of unregistered securities to 2018 ICOs.
If this is the precedent, there are very ugly implications here. pic.twitter.com/eYElw9BHno
— Dylan LeClair 🟠 (@DylanLeClair_) September 19, 2022
Other cryptocurrency community members have also accused the SEC of going too far.
The SEC v. Ian Balina released today included the following notable points: Essentially: “The alleged crimes on the Ethereum network originated in the United States because ETH nodes are clustered more intensely in the United States than elsewhere.”
—AlexanderGrieve.sol/.eth (@AlexanderGrieve) September 19, 2022
SEC Chairman Gary Gensler previously said that crypto assets that allow staking may qualify as securities under the Howey test. The statement comes hours after Ethereum (ETH) completed its transition to a proof-of-stake consensus mechanism.