The fundamental problem with the SEC’s theory is its assumption that the relevant ETH transactions necessarily “took place in” the US just because blockchain nodes “are clustered more densely in the United States than in any other country.”
Although the Ethereum network nodes are primarily hosted using commercial hosting services, the network itself is not majority-located in any one country, nor does the US account for an absolute majority of total nodes worldwide.
The SEC’s jurisdictional allegations assume that, given that most nodes are US-based, it would be unlikely that any ETH transaction could be executed without at least some nodes being located in the US. But this is only an inference, and not necessarily a strong one.
‘Enforcement 40’ for 2020
Join Us On LinkedIn
Join the Securities Litigation and Enforcement Group on LinkedIn