Ether (ETH) Is Not A Security – SEC Says

Source: ZyCrypto, originally published on .

https://zycrypto.com/ether-eth-is-not-a-security-sec-says/.

Ether (ETH) Is Not A Security - SEC Says

Prior to this, there was an announcement made much earlier in the week by the SEC chairman, where he clearly defined and differentiated currencies from tokens and what should be regulated and what shouldn’t.

The SEC’s Director of Finance, William Hinman said the commission isn’t classifying ETH and BTC as securities, and therefore will not be regulated.

This statement sounds like opposition to what the SEC Chair earlier said, which was the interpretation of what the agency’s policy states. But for Ethereum, it seems like the SEC had to make an exception.

Hinman in his speech mentioned the agency would not change its rules concerning digital assets, but though Ethereum had fallen under the category “Securities,” but there has been a general agreement that the token, alongside the bitcoin cryptocurrency is similar to commodities, such as gold and crude oil.

“Can a digital asset originally sold in a securities offering eventually be sold in something other than a security?” Hinman asked. “How about cases when there’s no longer a company [involved]? I believe in those cases [the] answer is a qualified yes.”

Further, Hinman explained that if a cryptocurrency network is entirely decentralized and investors or token holders do not have any expectation from a third party, which most likely would be the team/founder in charge, then that coin isn’t a security.

Now that the positions on these two cryptocurrencies with the highest market capitalization is clear, it’s possible we begin to a positive reflection on their prices soon.

The next question would then be, what does this mean for cryptocurrency exchanges? Well, it’s quite simple, cryptocurrency exchanges which offer just Bitcoin and Ethereum alone may not need to be regulated by regulatory agencies.

Nevertheless, if the exchange would list other cryptocurrencies that fall under securities, depending on what country the exchange operates, there might be a need to get approval from proper authorities.

The post Ether (ETH) Is Not A Security – SEC Says appeared first on ZyCrypto.

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