The currently ongoing court case between Ian Balina and the SEC is illustrative in terms of revealing the approach of the federal US government toward some cryptocurrencies. The SEC claims that a large number of US citizens are acting as validators and comprise a significant majority of the investment pool used to validate transactions conducted on the network. The US authority states that such a majority grants them jurisdiction over network transactions.
The line of defense is drawn and should be held firmly
Ethernodes has been tracking the distribution of all validating nodes and indicates that at least 43% of all validator nodes are operated from the US territory. The European Union operates another 30% with about 12% operated by Germans alone. It means that the ruling of the court can change the governance of the network by directly censoring the network instead of trying to find a compromise with validators. 43% is a large number.
This approach by SEC was not ignored by the crypto community. The most obvious response to it is that 67% of all nodes are operated outside of the US meaning that the nation does not have the simple majority in the network. Another important thing is that the SEC wants to turn ETH into security under new regulations saying that the PoS mechanism means that validators are now investors that qualify under the Howie principle.
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One thing is certain — the US government wants to take a stronger stance toward cryptocurrencies in general and wants to test the waters with Ethereum. The latter has been struggling in the crypto market after the merger. However, it does not mean that it is small enough for this move by SEC to go unnoticed by the international crypto community. Ethereum is still the second biggest crypto chain in the world.
We can react only after the court ruling
Right now, the situation around the legal status of ETH is uncertain. Unfortunately, we have to wait to see the decision of the court to understand the real position of the US government regarding cryptocurrencies using the PoS mechanism and Ethereum in particular.
