Because ETH nodes are “clustered more thickly” in the United States than in any other nation, the Securities and Exchange Commission (SEC) has made the unprecedented claim that Ethereum transactions take place in the country, as reported by Cointelegraph.
According to Cointelegraph, the SEC’s reasoning may be found in a lawsuit filed on September 19 against cryptocurrency researcher and YouTuber Ian Balina. Among other things, the lawsuit claimed that Balina ran an unregistered offering of Sparkster (SPRK) tokens in 2018 when he established an investment group on Telegram.
The SEC asserts that at the time U.S.-based investors joined Balina’s investment pool, a network of Ethereum blockchain nodes, “which are clustered more densely in the United States than in any other country,” validated the ETH contributions, Cointelegraph noted.
The validity of such a claim in court and the existence of any guiding legal precedent are currently unknown. However, according to Ethernodes, 42.56% of the 7807 Ethereum nodes are now located in the United States.
The SEC has already come under fire for its regulatory approach to cryptocurrencies, which some have dubbed “regulation by enforcement.”
Gary Gensler, the chairman of the SEC, recently made a suggestion that shortly after Ethereum switched to proof-of-stake on September 15, Ether-based staking would also be subject to U.S. securities regulations.
In a 19-part Twitter thread in response to the complaint, Balina claimed that the allegations were “baseless” and that he had “turned down settlement so they [SEC] have to prove themselves.”
(With insights from Cointelegraph)
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