Consensys provides 4 reasons to prove that Ethereum is not a security! If it is recognized as a security, the impact will be huge.

This site (120BtC.coM): Consensys, the parent company of Little Fox Wallet Metamask, received a Wells Notice from the U.S. Securities and Exchange Commission (SEC) this month. SEC It was determined that Consensys was an unlicensed broker-dealer and intended to take enforcement action on the grounds that the MetaMask wallet violated securities laws.

Consensys then launched a counterattack, filing a lawsuit with the SEC last Thursday, accusing the SEC of intending to recognize Ethereum as a security, which is an "illegal seizure of power" over Ethereum, and asking the court to declare that Ethereum is not a security, claiming that Any investigation into ConSenSys based on the premise that ether is a security would violate administrative procedures.

Four reasons why it should not be considered a security

According to BeInCrypto, a spokesperson for Consensys listed four reasons during an interview, emphasizing that Ethereum should not be considered a security.

1. SEC’s historical stance on Ethereum

William Hinman, former director of the SEC’s Division of Corporate Finance, stated in 2018 that Ethereum is not a security. The SEC has not officially retracted this position. The SEC suddenly changed its view without substantial new evidence or changes in circumstances, which appeared to be unfounded and in conflict with previous regulatory guidance.

Consensys spokesperson said: According to Director Hinman’s opinion in 2018, there is no difference between the current situation and 2018. At this stage, in terms of theory and openness, if there is a difference, it is the development and research of Ethereum. , and the number of people adopting Ethereum is even greater than before.

2.CFTC classifies Ethereum as a commodity

The U.S. Commodity Futures Trading Commission (CFTC) has long regarded Ethereum as a commodity, and the CFTC recently targeted cryptocurrency exchange KuCoin In the civil enforcement action, Ethereum was clearly classified as a commodity. This classification consolidated the market's understanding and regulatory treatment of Ethereum, and further demonstrated that Ethereum has a completely different role and function from securities.

Consensys spokesperson said that the SEC’s previous position and the CFTC’s consistent determination jointly support the argument that Ethereum is a commodity, not a security: The SEC has made it clear for many years that Ethereum is a commodity, so there is no need to If you look closely, you only need to look at the CFTC's continued statements and the SEC's past statements to get the correct result.

3. Decentralization and open protocols

The essence of the Ethereum architecture is decentralization, which is different from typical securities (managed by centralized entities, allowing insiders to benefit from information asymmetry) profit), Ethereum runs on a platform where all information is publicly accessible.

Consensys spokesperson said: Ethereum is undoubtedly decentralized. There is no core issuer or group that controls the overall situation, and there is no development team with privileged internal information. This is a typical must for securities. form of joint enterprise.

4. Not related to the consensus mechanism change

Ethereum recently transitioned from Proof of Work (PoW) to Proof of Stake (PoS) consensus mechanism and was listed by the SEC as reclassifying Ethereum potential reasons, but the shift does not affect the core nature of Ethereum or its non-security classification.

Consensys spokesperson said: Looking back at Director Hinman’s speech in 2018, he stated that Ethereum is not a security. This view is not based on the PoW or PoS mechanism. The consensus mechanism has nothing to do with whether it is a security.

The move to PoS does not introduce elements typical of securities, such as dividends or ownership rights in a central enterprise. This is simply a technological evolution that enhances efficiency and sustainability without changing the underlying decentralized nature of the platform.

If ETH is recognized as a security, the impact will be huge

Just late yesterday night, Consensys officials also tweeted a warning that if the SEC successfully recognizes Ethereum as a security, many companies and developers will have to work hard for many years. Gains would be lost, billions of dollars in economic value would be destroyed, and there would likely be mass unemployment among American workers.

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