The SEC claims it has control over the Ethereum network as 45% of validator nodes are located in the US.
In statements that have surprised the entire crypto community, the United States Securities and Exchange Commission (SEC) has attributed control of the Ethereum network, under the pretext that 45% of the validation nodes are located in the United States.
The SEC's argument comes as part of a lawsuit filed against Ian Balina, a crypto researcher and YouTube influencer, alleging that Balina conducted an unregistered offering of Sparkster (SPRK) tokens when he was part of an investment group in Telegram in 2018.
The SEC alleges that at the time the US-based investors participated in the Balina investment pool, the Ether (ETH) contributions were validated by a network of nodes on the Ethereum blockchain, “which are grouped more densely in the United States than in any other country.”
The SEC therefore points out that, as a result, “those transactions took place in the United States.”
According to data from Ethernodes, at the moment the 42,56% of Ethereum's 7807 nodes are located in the United StatesThe second country with the most Ethereum validator nodes is Germany, with 19% of the nodes in its territory.
However, it is unclear whether the claim will stand up in court, as some specialist lawyers and industry experts have been quick to point out that The location of Ethereum nodes is irrelevant to the case in question.
In response, Ian Balina has said in a Twitter thread that the allegations are “baseless” and rejects the deal offered by the SEC to force them to prove the charges.
The SEC has been widely criticized by the community for its Focus on cryptocurrency regulations. In this sense, shortly after Ethereum had implemented The Merge, on September 15, Gary Gensler, SEC Chairman, was quick to point out that the new Proof Of Stake mechanism could result in ETH being considered a security and therefore activate the securities laws of the United States.
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