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

The Breakdown

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The Supreme Court's Application of Howey to Proof of Stake Ethereum

Argument that proof of stake results in ETH being deemed an investment contract fundamentally misinterprets the second and fourth prongs of howey. The conclusion would also result in an absurd and unnecessary application of securities laws because there is no issuer or promoter with privileged access to information who could or should be forced to make disclosures. As explained below, staking ETH entails neither horizontal nor vertical commonality and thus fails to meet the common enterprise prong ofHowey.

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