SEC says all Ethereum transactions fall under U.S. jurisdiction, Crypto-Upvotes expert review
SEC filed a lawsuit against Ian Balina, a famous member of cryptocurrency community. The lawsuit states that all Ethereum blockchain transactions take place in USA territory
The Securities and Exchange Commission (SEC) claims that transactions on Ethereum are made in United States. Because blockchain validators (network nodes) are clustered more tightly in the United States than in any other country. This claim was made in a lawsuit against famous member of cryptocurrency community Ian Balina.
The lawsuit was filed Monday, Sept. 19. Balina is accused of breaking law while promoting Sparkster Cryptocurrency ICO (SPRK) in 2018. Which raised about $30 million from 4,000 investors.
This is not the first time the agency has initiated such litigation. However, paragraph 69 of this lawsuit states : ” At that point, their ETH contributions were validated by a network of nodes on the Ethereum blockchain,
which are clustered more densely in the United States than in any other country. As a result, those
transactions took place in the United States.”
According to Etherscan, more than 46% of all Ethereum nodes are now operating in the US.
What this means for Ethereum
Our experts think that mentions of transaction processing by US-based nodes in a lawsuit against blogger Ian Balina. It can also be interpreted as the SEC attempt to extend its jurisdiction over any transactions in Ethereum network according to geographical principle. And in the future, this could become a precedent and reinforce the current fears of transaction censorship. Which have arisen since sanctions were imposed on Tornado Cash mixer.
Following the Ethereum move to Proof-of-Stake. And given its high level of centralization, Coinbase, Kraken and Binance are estimated by Nansen to account for 30.25% of ETH blocked in stacking. The U.S. government could seriously consider bringing this space under its control.
In future case law, similar lawsuits from the SEC may await other cryptocurrencies. Which work on the Proof-of-Stake algorithm.