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Wednesday, September 28, 2022

SEC Lawsuit Claims Jurisdiction As ETH Nodes Are Clustered In The U.S.

According to the SEC Lawsuit, because ETH validators are more widely dispersed around the country, ETH transactions are perceived as occurring there.

Because Ethereum nodes are “clustered more densely” in the United States than in any other nation, the Securities and Exchange Commission (SEC) of the United States has made the unusual allegation that domestic Ethereum transactions occur.

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The SEC Lawsuit’s claim was made in a lawsuit filed on September 19 against cryptocurrency researcher and YouTuber Ian Ballina, which claimed, among other things, that Ballina offered Sparkster (SPRK) tokens without registering them when he established an investment group on Telegram in 2018.

According to the SEC Lawsuit, the Ether (ETH) donations were verified when U.S.-based investors joined Balina’s investment pool by a network of Ethereum blockchain nodes, “which are concentrated more densely in the United States than in any other country.”

The SEC Lawsuit Claims Jurisdiction As ETH Nodes Are Clustered: 

It is still unknown if a claim of this nature will stand up in court or whether a legal precedent is in question. According to Ethernodes, the United States is now home to 42.56% of the 7807 Ethereum nodes.

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Aaron Lane, an Australian attorney and senior postdoctoral researcher at the RMIT Blockchain Innovation Hub, stated the distribution of Ethereum nodes is mainly irrelevant to the current issue in his interview with Cointelegraph.

Although Lane acknowledged that the SEC’s allegation was an intriguing one, he said that even if Balina’s attorneys concede the jurisdictional problem, it won’t now have any impact on further cases.

The SEC has already come under fire for its approach to crypto regulation, which some have dubbed “regulation by enforcement.”

Gary Gensler, the chair of the SEC, recently suggested that shortly after Ethereum switched to proof-of-stake on September 15, Ether-based staking would potentially be subject to U.S. securities regulations.

 

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