As Ethereum faces a regulatory storm, Cardano founder Charles Hoskinson, in a now-deleted tweet, shared his thoughts surrounding ETH’s transition from proof of work to proof of stake. For context, the U.S. SEC is reportedly considering classifying the second-largest altcoin as a security, sparking intense discussions in the crypto community. Hoskinson suggested that any investigation surrounding the token does not revolve around the historical initial coin offering [ICO] in 2014 but instead on the 2022 PoS transition.
According to the Cardano founder, this shift represents a significant change in Ethereum’s fundamental structure that could potentially lead to a reevaluation of its legal status. Hoskinson argued that Ethereum 2.0 offsets any past controversies or discussions about its classification as a security, and should be treated as a new cryptocurrency with a distinct set of characteristics and circumstances.
In his analysis, past events such as the controversial “ETHGate” and discussions surrounding Ethereum’s status as a security during its proof-of-work phase hold little relevance under this new legal interpretation. Instead, the focus would shift to determining whether Ethereum, at the moment of its proof-of-stake launch, could be considered a security and who would be deemed the issuer of that asset.
The investigation isn’t related to historical facts and circumstances around the 2014 ICO, but rather to the position that the 2022 transition from proof of work to proof of stake is a new cryptocurrency with a new set of facts and circumstances. What that means is that everything about ETHGate and proof of work, prior statements, etc etc would be irrelevant since Ethereum 2 reset the clock and has a blank slate legal interpretation.
Cardano: Hoskinson’s Response to Ethereum Critique
In the past, the Cardano founder faced backlash for his stance on Ethereum, prompting him to remove his original post. He then subsequently tweeted again, expressing his determination to continue posting once the backlash subsided.
According to a recent report in Fortune, the Securities and Exchange Commission has renewed its legal efforts to classify Ethereum as a security, potentially affecting its regulatory status and ETF approvals. Despite the uncertainty, Ethereum’s price bounced back, demonstrating resilience amidst a volatile crypto market.
Additionally, BlackRock, the world’s largest asset manager, applied with the SEC to launch a tokenized investment fund named the “Blackrock USD Institutional Digital Liquidity Fund” [BUIDL] on the Ethereum blockchain. Reportedly, the AUM has seeded $100 million for this venture.