US Securities Authority “Ethereum upgrade, we need to see if it’s a stock”
Ethereum, the second largest cryptocurrency market capitalization, is showing a sharp decline after a system upgrade that fundamentally reorganized the blockchain system.
According to CoinDesk, a virtual currency information website, the price of Ethereum was $1,475 (about 2.06 million won) as of 10:11 Korean time on the 16th, down 8.21% from 24 hours ago.
Ethereum once plunged to $1,447.36 on the same day, and fell more than 6% the day before.
Ethereum has shown a higher rate of progress than other cryptocurrencies in recent months using a system upgrade as material, but after the actual system upgrade began, it turned to decline as the market said ‘Sell on the news’, Bloomberg reported .
According to Coinmetrics, Ethereum recorded an increase of almost 70% in July alone, before the system upgrade.
During the same period, Bitcoin rose 27%.
Even in August, when cryptocurrency prices fell, Ethereum only lost 9.3%, outperforming Bitcoin, which fell 17%.
Anton Faroian, CEO of cryptocurrency hedge fund ARK36, told CNBC in the US that the price of Ethereum has risen more than 100% from the low in June, and the effects of the system upgrade have already been reflected in the price .
Bitcoin, the number one cryptocurrency market cap, also fell 1.16% to $19,770.19 at the same time.
Earlier, from the night of the 14th, Ethereum entered the ‘Merge’ upgrade, which converts the blockchain system.
This upgrade changes the way Ethereum works from Proof of Work (PoW), which requires a large amount of computational work and power consumption, to Proof of Stake (PoS).
Accordingly, in the future, the ‘verifier’ who deposits a lot of coins will verify the authenticity of transactions on the block chain and will be rewarded with coins.
In this regard, Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC), said on the 15th (local time) that it is necessary to examine whether Ethereum, which has been upgraded to the system, is subject to conditional security on SEC regulation. .
Chairman Gensler said that intermediaries such as cryptocurrencies and exchanges that provide staking services (depositing a coin) may be required to have a ‘howey test’ under the Securities Act.
Under securities law, the so-called Howi test, securities are considered if ▲ there is a joint business ▲ money is invested in the business ▲ a return is expected on the investment ▲ the profit from the efforts of the promoters or third parties made.
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