Market Analysis Report (20 Sep 2022)

In a lawsuit the U.S. Securities and Exchange Commission (SEC)  has claimed Ethereum transactions fall under U.S. jurisdiction. The lawsuit was filed against crypto influencer Ian Balina over his alleged failure to register a cryptocurrency as a security before launching an initial coin offering (ICO) in 2018.

In a bold move, the SEC claimed it had the right to sue Balina, not only because his case concerns transactions made in the United States, but also because the Ethereum network falls under the government’s jurisdiction.

Per the regulator, the ETH sent to Balina was “validated by a network of nodes on the Ethereum blockchain, which are clustered more densely in the United States than in any other country.” To the SEC, this means that “those transactions took place in the United States.”

The SEC is seemingly suggesting that because more of Ethereum’s nodes are operating in the United States, ETH transactions globally should be considered of U.S. origin. Etherscan data shows 45.85% of all Ethereum nodes are operated from the United States.