Crypto investors who have been celebrating this week’s overhaul of Ethereum’s blockchain may have to deal with an unwelcome guest at their party: US Securities and Exchange Commission Chair Gary Gensler.

Gensler on Thursday signaled that a feature of the network’s software could lead to tokens being considered securities by the SEC. While Gensler was careful to say he wasn’t speaking about any digital coin specifically, his comments add to questions about the Wall Street regulator’s views on Ether, which is the second-biggest virtual currency. 

Gensler has said that Bitcoin, the largest cryptocurrency, isn’t covered by the agency’s securities rules. However, he’s been less unequivocal on Ether. That stance contrasts with that of the agency during the Trump administration and comments made by the top US derivatives regulator, which considers Ether to be a commodity -- a legal label that places the token outside of the SEC’s purview.

On Thursday, Gensler took issue with a feature of Ethereum’s new upgraded blockchain, which has been dubbed the “Merge.” He said that a process known as “proof-of-stake,” in which coin holders can earn financial rewards by allowing a network to use some of their assets, could fall under securities rules. Ether had used the “proof-of-work” method that Bitcoin uses to run its blockchain.

Crypto firms are seeking to avoid the security label because it carries investor-protection requirements that many say are incompatible with with the asset class. “There is a full disclosure obligation on these projects,” Gensler told reporters.

Figuring out if the process of staking Ether -- or earning a return by permitting the revamped Ethereum to deploy the coin -- leads to a security involves complicated legal analysis, according to Brett Harrison, president of FTX.US.

“Perhaps the staking in such a system might be considered an investment contract of some kind and that is really an open question,” Harrison said on Bloomberg Television.

Harrison added that there are multiple kinds of staking, adding to the complexity. These include directly participating in the network to get rewards, achieving the same goal indirectly and a very different opportunity set of putting coins into a decentralized finance protocol.

--With assistance from Suvashree Ghosh.

This article was provided by Bloomberg News.