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SEC claims jurisdiction over Ethereum is under US regime purview

Dave - Cryptocurrency Enthusiast

Following the case brought against crypto influencer and CEO of Token Metrics Ian Balia, the U.S. Security Exchange Commission (SEC) asserts that the U.S. government still has authority over Ethereum. For failing to declare his coin as security before the Initial Coin Offering (ICO) in 2018, the defendant was sued on Monday.

The SEC has been suing people and businesses for unregistered ICO concerns, so even though the case first seemed routine, it eventually took a different turn.

The critical argument made by the SEC in the lawsuit's 69th paragraph, which was audacious and unheard of, caught many people's attention.

The SEC claims the following in the 69th paragraph of the lawsuit:

When the U.S.-based investors in Balina's pool had their ETH contributions validated from within the country at that point by a network of nodes on the Ethereum blockchain, which is clustered more densely in the United States than in any other country, they became irrevocably committed to the transaction. Consequently, those transactions happened in the US.

The SEC claimed in the complaint that it was entitled to sue Balina because, in addition to the fact that the transactions took place in the United States, the majority of all ETH nodes (45–85%) that validate transactions are located in the United States, which logically falls under the jurisdiction of the American government.

The crypto community was alarmed by this idea, and some people commented on Twitter.

Although the complaint's phrasing lacks the legal authority for the court to uphold it, University of Kentucky law professor Brian Fyre expressed skepticism about it.

While Gary Gensler, the chair of the SEC, disagrees with Fyre's assessment, he believes that as Ethereum switches to proof-of-stake, it is more in line with the government's definition of security. Ian Balina then responded to the SEC's allegations, pointing out their lack of merit.

As Ethereum recently switched to proof-of-stake its price went down, though others believe that it is only temporary. If you believe that ETH price will go up and you do not know how to invest in it, you can visit BCBitcoin – a platform where you can find various guides that would help you learn more about cryptocurrency. Also, BCBitcoin provides such services as coin swap, buying crypto, as well as crypto asset management by keeping customers' currencies safe and sound.

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