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A Legal Argument for Why Staking Doesn’t Make ETH a Security

The Breakdown

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Ethereum's New Staking Model Does Not Make ETH a Security Under US Securities Law

Some commentators have suggested that the new staking model could result in its native token Ether or ETH being deemed a security under US securities law. This interpretation while sometimes proffered in a political way on Bitcoin or crypto Twitter has also seen some validation in SEC enforcement actions. As explained below, Ethereum's adoption of a proof of stake consensus mechanism does not make ETH or even stake ETH an investment contract. Such a finding would result in a nonsensical application of securities laws.

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