The United States Securities and Exchange Commission (SEC) have spoken out at the Yahoo Finance All Markets Summit, stating that Bitcoin and Ethereum cannot be classed as securities as they do not benefit a single entity.
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.
The statement and confirmation comes from William Hinman, the Director of the Division of Corporation Finance at the SEC, according to CCN Hinman has said:
“Putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions. And, as with Bitcoin, applying the disclosure regime of the federal securities laws to current transactions in Ether would seem to add little value.”
See the full article by CCN for yourself here-
As stated, though this sort of announcement was not expected, it does of course provide an air of relief to cryptocurrency investors within the United States. Whilst a Bitcoin or Ethereum security association did seem unlikely, it is nice to see that the SEC are at least delving into the idea that they could be a security, if only to prove the fact that they are not.
Moreover, according to CCN:
“The speech of Hinman was specifically noteworthy and important because it was the first case in which an official from the SEC provide clarity on the nature of Bitcoin and Ethereum in a public statement. Some analysts have stated that the SEC likely offered clarity on the two cryptocurrencies to prevent the cryptocurrency industry and blockchain sector of the US from falling behind other leading markets.”
Because of the scale of this announcement, we might very well see the SEC speak out about Ripple XRP next, which clearly has very strong implications. Obviously, we can’t predict when this will be, but we do know that when the SEC make an official statement about XRP, it will make ripples across the markets (pardon the pun).
Overall, the markets seem to be reacting well to this news, hopefully as the day goes by we will see a bit of life injected back into the values of the major cryptocurrencies. If anything, this has got people talking and that can only be a good thing, at the end of yet another disappointing week for cryptocurrencies.