Ethereum spikes after the SEC declares it's not a security

U.S. Securities and Exchange Commission Director Division of Corporation Finance William Hinman

Ethereum spikes after the SEC declares it's not a security

The remarks come after months of speculation as to whether either would be deemed a security by U.S. regulators, making it subject to more stringent rules than bitcoin. The determining factor that keeps Bitcoin from being labeled a security is the fact that it's decentralized. The question hinges on whether investors are buying tokens with the expectation that they will increase in value based on the efforts of others.

So reports CNBC, which notes that the SEC's head of the Division of Corporate Finance, William Hinman, delivered the news at the San Francisco Yahoo All Markets Summit: Crypto conference.

These statements are the most recent in the long line of remarks that found a lot of regulatory officials haranguing on whether the sale pattern in which the digital currency was issued subjected it to the United States securities laws.

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Of course, this was pretty obvious as really, Bitcoin and Ethereum aren't exactly associated with the notion of a security, the big one for the SEC is of course Ripple's XRP, a debate which continues to split members of the crypto-community. "Applying the disclosure regime of the federal securities laws to the offer and resale of Bitcoin would seem to add little value", he said. 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.

By determining which ICOs are securities, they would come under the SEC's regulations. Ether is also not a security for the same reason.

When ETHNews inquired about the timeline for introducing Ether futures, Cboe executives declined further comment. Cboe and CME Group Inc. begin offering bitcoin futures previous year.

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.

"We are pleased with the SEC's decision to provide clarity with respect to current Ether transactions", Concannon said.

"Hinman's statement on Ether's status as a non-security in particular is important as a concrete example of the ways in which a digital asset that potentially entered the market as a security can transform through decentralization into something very different", he said in an email to Business Insider.

AlphaPoint, the company that powers numerous world's cryptocurrency exchanges and helps digitize assets, is the latest company added to the orbit of billionaire former hedge fund manager Mike Novogratz.

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