SEC announces cryptocurrency ether is not a security

[marn6767]

Are bitcoin and ether securities? Finally, one of the biggest questions and debates in crypto has been answered by the SEC, officially.

In an announcement at Yahoo Finance’s All Market Summit: Crypto in San Francisco on Thursday, the U.S. Securities and Exchange Commission Director of Corporate Finance William Hinman said that the commission would not be classifying ether or bitcoin as securities.

The commission’s policy is in line with what SEC Chair Jay Clayton said recently about bitcoin: that cryptocurrencies are not securities and the definition of “security” would not change to include bitcoin. (Clayton said digital tokens were securities, but cryptocurrencies were not.) Hinman’s announcement marks the official position of the SEC: the name isn’t important, but the way in which it’s sold, promised, and behaves is the key deciding factor.

What is Ethereum, what is ether?

Hinman said that the SEC will not be changing cryptocurrency and digital asset rules, but rather would be applying them. Previously, bitcoin and ether may have been offered as securities (like shares of a company), which would have required registration with the SEC, but a consensus has emerged that they behave and are treated like commodities, similar to gold and oil.

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

Hinman said “form is disregarded for substance,” in the SEC’s thinking. The economic realities, he said, are more important than how something is labeled.

If a cryptocurrency network is sufficiently decentralized and purchasers no longer have expectation of managerial stewardship from a third party, a coin is not a security, Hinman added.

Similarly, labeling an investment opportunity as a “coin” or a “token” does not make something not a security, Hinman added.

Officials at the Commodity and Futures Trading Commission (CFTC) had long urged the SEC to clarify its position on ether, and the two agencies had been discussing how the currencies were first offered. The CFTC allowed bitcoin futures to be traded last year on three exchanges.

Had the SEC deemed ether or bitcoin securities, cryptocurrency markets would have likely been sent into a selling frenzy, faced with uncertainty on how regulation would apply to exchanges, ownership, and markets.

https://finance.yahoo.com/news/sec-announces-ether-not-security-162658147.html?guccounter=2

[ugur2222]

wooow this is awesome news. coming to bull season. Im ready =)

[omitusaf]

The bull run has started. The market is rejoicing at this news. Now cryptocurrency is taking its deserved place in the industry. We're looking out for more endorsements. Earlier, Germany accepted cryptocurrencies as a legal tender. This might be the beginning of a new era. 

[cryptohunter]

big news I would expect a huge huge rally after such pro crypto news from one of the main sources of possible problems for crypto.

[franky1]

it never was.. infact. if it was or wasnt was never in question

a security represents:
an ownership position in a publicly-traded corporation (via stock),
a creditor relationship with a governmental body or a corporation (via bond),
rights to ownership of a corporation( via shares)

so as long as a token does not represent ownership/relationship of a particular company.. its not a security

[BitcoinLendingICO]

I really hope this will be the spark of the next bullrun!

[avikz]

After a long time, somewhat sensible came out from SEC. But knowing their double faced nature, I still doubt their implementation process. Because few days back SEC chairman classified all ICOs as securities without changing the rules and regulations around it. So little sceptical.

Bitcoin or ETH was never a security by difinitation because they don't represent ownership of a company. However, ICO tokens can be called as a security as per their nature.

However, I see problem in one statement, "the SEC will not be changing cryptocurrency and digital asset rules, but rather would be applying them." The question is how!! SEC is well known for playing double standard. So take calculated risk before cheering to this news.

[liberty02]

That is really good news for crypto. We all knew that crypto was not a security it just needs to come from the SEC to make it legit. This positive news hopefully will spark another Bull Run.

[jzale]

Well if anything else, this means that there is no threat anymore for this issue. The green has already started to move again and I hope this continues in a slow pace in the next few days or weeks. There will be major pull backs and slow bull runs all through out just like the old times. Though this is still good news for us.