The U.S. Securities and Exchange Commission (SEC) has been actively trying to provide regularity clarity over crypto. However, Ethereum, the world’s second largest crypto will be shifting from a proof of work (PoW) system to a proof of stake (PoS).
Meanwhile, ETH Merge has now sparked a debate over the token’s nature after the upgradation.
SEC to chase Ethereum?
As per reports, the most awaited Ethereum Merge is set to occur anytime between September 10 to September 20, 2022. Meanwhile, John Deaton, Amicus Curiae in the SEC vs Ripple lawsuit has raised questions over SEC’s take over Ethereum’s nature.
In a thread, Deaton highlighted that this transition is a dangerous bet on decentralization. This can easily attract the eyes of regulators. He hinted that it cannot be ruled out that the SEC chair might go after Ethereum.
XRP lawyer suggested that Gary Gensler may use the Merge as a basis to officially reverse Hinman’s comments on a “security”. However, SEC Chair called Bitcoin a commodity excluding ETH.
Selective enforcement by Watchdog?
Deaton also mentioned that it is difficult to convince the commission that a token started out as security but later transformed into a non security. However, the main reason for SEC going after Ethereum can be the claim that they don’t winners through enforcement.
However, in a congressional hearing SEC enforcement director testified that they don’t engage in selective enforcement. Meanwhile, XRP lawyer doesn’t believe in this testimony. He states that it was silly, false, and unnecessary.
Deaton slamming SEC said that the regulatory bodies usually engage in selective enforcement. He adds that the commission selects cases considering that they will have a deterrent effect on rest. They can’t go after everyone that has sold any kind of investment contract.
As there are over 10k digital assets in the market. The SEC will select the ones which suit them.