This story has been refreshed to incorporate organizations supporting the Proof Of Stake Alliance pushing the SEC, incorporating improving to Cardano Foundation, Coinbase Custody, and Binance.US.
The POSA ( Proof of Stake Alliance ) is a very niche trade alliance on Capitol Hill in the blockchain space. The coalition of Coinbase Custody, Polychain, Cardano Foundation, and Tezos, and others such as Bison Trails, Binance.US, AVA, and the Web3 Foundation, among others, look to grant regulatory clarity around how securities legislation at the SEC apply to specific blockchains.
POSA is explained on their website as ‘formed to tackle key industry-level concerns. POSA’s initial objective is to effect legal and regulatory clarity to the nascent proof-of-stake industry. We conclude that it is among the most crucial and high-impact initiatives that our members can collaborate on, which will positively reshape the health and benefit of the staking industry.’
The founder of Proof of Stake Alliance spoke at Consensus Distributed, a week-long Digital conference, about their aims with the SEC as well as a white paper that was distributed, and also how they expect to provide standards as well.
Initially reported in CoinDesk, the group’s founder and Chief of Staff at Bison Trails, Evan Weiss stated the idea the group attempts to convey to the Securities and Exchange Commission (SEC). All of those entities practicing stake networks should be seen as service or infrastructure providers, and not just financial product providers. Representatives of Cosmos and Tezos were provided as blockchain networks that were present in the industry and used the proof-of-stake protocol.
Weiss remarked the group shared recommendations with the SEC, taking note of the idea that investment advice should not be presented to market participants or study staking rewards as a ‘profit opportunity’ and no guarantees on staking bonuses. The Proof Of Stake Alliance believes that, through its education, regulators better experience the blockchain technology itself, which is advantageous for the overall ecosystem if the underlying blockchain rather than the coins and tokens can avoid being regulated. The white paper is below, and more information can be found at www.proofofstakealliance.org.
Does Staking Shifts Ethereum Token From Commodity To Security?
While POSA ( Proof of Stake Alliance ) looks to change the perception of a proof-of-stake network to perform it about infrastructure and security on a blockchain and bypass the argument about the tokens on the web, this does appear to be an uphill battle and not just with the SEC. However, Bitcoin and Crypto Reviews and Bitcoin tester can provide a push in understanding the platforms and Help you choose one that best aligns according to your needs.
At the end of last year, Ethereum has deemed a commodity as opposed to security by Chairman Heath Tarbert of the Commodity Future Trading Commission (CFTC). Tarbert noted at a CoinDesk Invest conference toward last year in response to a question that the CFTC was doing some careful thinking about whether a move to a proof-of-stake protocol means Ethereum would lose its commodity status and go back to being security.
The CFTC had put out a questionnaire in the Federal Register with targeted questions on the proof-of-stake mechanism such as ‘Relative to a proof of work consensus mechanism does proof of stake have particular vulnerabilities, challenges, or features that make it prone to manipulation? In responding consider, for example, that under a proof of stake consensus mechanism, the chance of validating a block may be proportional to staked wealth.’ Additionally, the questions indicated concern that if there were disagreement in the Ethereum community over the move to proof-of-stake, would this diminish or adversely impact the Ethereum market.
It will be interesting to see, as CoinDesk pointed out, with established trade associations such as the Chamber of Digital Commerce and the Blockchain Association, whether this specific issue can help carve out regulatory clarity for those in the industry using these types of blockchain networks.