The digital asset industry continues to face regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC). SEC Chair Gary Gensler recently suggested that Ethereum-based projects built on a proof-of-stake consensus mechanism should be under the SEC’s purview as they are securities.
Gensler’s comments have caused some consternation among Ethereum developers, as several projects have been built on this network since its PoS switch last September. Gensler further mentioned that more attention is paid to cryptocurrencies using the Proof-of-Stake system, such as Ethereum.
An All-In-One Ecosystem DAO For Regulatory Certainty
The SEC chair remarked that these tokens might be considered securities if they are marketed by their creators, with the potential to generate returns. At the SEC’s recent open meeting, he suggested that those operating such tokens should seek to conform with the law, with relevant advice.
As the digital asset industry grapples with regulatory uncertainty, one project that could benefit is ETHW. ETHW is a proof-of-work-forked version of the current Ethereum blockchain.
It also facilitates decentralized finance (DeFi) projects. Recently, the team behind Ethereum Proof-of-Work (PoW) has proposed the formation of a comprehensive All-In-One Ecosystem DAO- EthereumPoW.
This concept was born out of their observation of the emergence of Non-Fungible Tokens (NFTs) and Decentralized Finance (DeFi) protocols in the PoW environment. Consequently, they envisioned the potential of such an all-encompassing system.
The proposed framework is still under development and will require the approval of the SEC before implementation. Until then, Ethereum-based projects remain subject to the SEC’s scrutiny, with the possibility of being labeled as securities.
To motivate developers, ventures, and investors to construct the EthereumPoW environment, the ETHW team proposed setting up a DAO (Decentralized Autonomous Organization). This would encourage participation and incentivize the participants to invest in the project.
Will Traders Turn To ETHW?
The Ethereum Proof-of-Work token ETHW is becoming more widely acknowledged and accepted within the crypto sphere. These positive developments have affected ETH’s price positively.
At the time of writing, the token has seen a 6% increase in value in the last 24 hours, and the past week has seen a rise of 27.8%, according to Coingecko data.
The attitude of U.S. regulatory authorities towards PoS tokens and Ethereum is stimulating the growth of ETHW’s market share and increasing its demand. The SEC chair’s recent comments potentially make it more difficult for Ethereum-based projects to gain regulatory compliance.
Therefore, ETHW could gain relevance and market share as traders flock to a network that doesn’t require compliance with SEC’s standards. If this occurs, it could fuel a rally in the token.
Many anticipate ETHW becoming the go-to platform for DeFi projects. Only time will tell if ETHW will become the preferred platform for traders.
Nevertheless, Ethereum developers must continue to innovate to stay ahead of the regulatory curve.