The cryptocurrency community enjoyed a little victory yesterday after a representative of the SEC, William Hinman said that Bitcoin and Ether are not considered securities by the SEC. Hinman made the SEC’s ruling known during the Yahoo All Market summit in San Francisco. He said that Bitcoin and Ether are both decentralized platforms and as such they are not considered securities by the SEC. However, other cryptocurrencies may fall into this category.
Bitcoin and Ethereum are not Securities but Ripple May be Considered a Security
Although Hinman did not comment of the status of Ripple, there are rumors that ripple may be considered a security. You'll recall that Ripple was recently sued with claims that the cryptocurrency is a security. Hinman did not comment on this but said that as time passes, there will be other fully decentralized networks that can function without being tagged as securities.
Hinman commented on the status of initial coin offerings acknowledging that there are some digital assets that can be considered as consumer items rather than as securities. This is especially so if the digital asset is bought for personal use and not as a form of investment. What he was implying is that initial coin offerings which typically include investing in say, golf club membership or in a book club and other investments for personal use cannot be considered securities.
Strict Interpretation of Security Laws
Regarding the SECs strict interpretation of laws, Hinman said:
“The world is excited about new technologies and there is a significant level of speculative interest surrounding them. However, there is also a high risk of fraud and this is why the SEC is strict.”
Hinman said that even with the new ruling, there is still bound to be confusion regarding the issue stating that his office is happy to help. He said:
“We are prepared to offer a more no-action guidance or formal interpretation of the classification of digital assets.”
Posted from my blog with SteemPress : https://smartereum.com/18825/sec-rules-that-bitcoin-and-ether-are-not-securities-but-the-fate-of-ripple-remains-unknown/
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