If Ethereum 2.0 is recognized as a security, where will the cryptocurrency go?

Recently, there is a piece of news about Ethereum in the industry. It seems that it has not attracted much attention, but it may profoundly affect the investment and future development of digital currency.

The news is this:

On November 12, 2019, Heath Talbert, chairman of the US Commodity Futures Trading Commission (CFTC), said that they are working with the US Securities and Exchange Commission (SEC) on Ethereum 2.0, which is an upgrade based on Proof of Stake (POS). version of Ethereum for re-evaluation analysis.

What does it mean? This means that the relevant U.S. regulatory authorities are evaluating the attributes of Ethereum 2.0, and once its attributes are determined, it will determine how the U.S. government supervises and handles issues related to Ethereum transactions and buying and selling.

Why is the assessment of Ethereum by US regulators so important? Because in the United States, all investment and trading activities are subject to legal supervision, and for items with different attributes, their trading and investment are subject to different legal supervision.

Some items have no threshold restrictions for investors, such as commodity investment, any investor can invest; while for other items, there are strict restrictions on investors, such as requiring investors to have a certain financial strength, a certain investment period, etc. .

The threshold set for investors will determine the minority of Ethereum investor groups. The small number of investor groups directly affects the price of Ethereum.

So what is the attitude of the U.S. regulators towards Ethereum? Did it become apparent recently? No, in fact, the U.S. regulatory authorities have made a certain judgment on Ethereum very early.

Let's review the history:

When Ethereum was first born in 2014, like most digital currencies that year, it was funded by ICO. At that time, the regulatory policy in the United States was not yet clear. Under such circumstances, Ethereum completed the token sale, thus avoiding supervision and questioning by regulatory agencies.

In June 2018, William Hinman, head of the Division of Corporate Finance of the US Securities and Exchange Commission, stated: "Based on my understanding of the current state of Ethereum, the network, and its decentralized structure, the current Ethereum products and None of the sales are securities transactions."

This statement means that Ethereum is not a security, so it is not regulated by US securities laws, so that anyone can invest and trade Ethereum without threshold.

On October 10, 2019, Heath Talbert, chairman of the US Commodity Futures Trading Commission (CFTC), said: "In my capacity as chairman of the US Commodity Futures Trading Commission, I believe that Ethereum is a commodity."

This statement also makes Ethereum exempt from legal supervision.

Then why did the U.S. regulators suddenly express their opinion recently that they need to re-evaluate Ethereum?

That's because with the development of work related to Ethereum 2.0, especially the transformation of Ethereum from a consensus mechanism based on Proof of Work (POW) to a consensus mechanism based on Proof of Stake (POS), this has resulted in the property of the Ethereum token ETH Subject to change. So regulators are starting to refocus on the native nature of ethereum.

However, there are only two possible results for the U.S. regulators to identify Ethereum 2.0, one is identified as a security, and the other is identified as a non-securities.

And what impact will these two identification results have on ordinary investors?

If Ethereum 2.0 is recognized as a security, the investment in Ethereum 2.0 will be affected by US securities regulations, which will inevitably require investors to qualify and disclose information, and it is impossible for anyone to Invest and trade at will, so the audience of Ethereum will be greatly reduced, and the price of Ethereum may also be affected.

If Ethereum 2.0 is recognized as a security, then more other listed digital currencies may be re-examined by the US regulatory authorities, which will inevitably have a comprehensive impact on digital currency investment and transactions.

The attitude of the U.S. regulators will not only affect investors in the United States, but also affect other countries in the world, which may affect more investors.

If the U.S. regulators do not consider Ethereum 2.0 to be a security, Ethereum will remain as it is now, and can be invested by the public without threshold.

As for how the U.S. regulators will judge Ethereum in the future, we will wait and see.