The Director of Corporate Finance of the Security and Exchange Commission (SEC), William Hinman, announced in Yahoo Finance’s All Market Summit that “Bitcoin, Ethereum and other decentralized cryptocurrencies will not be classified as securities.”
Hinmann first discussed how the SEC analyzed different currencies; The most important factor was the circumstances surrounding the currency and the way it was distributed. He explained:
Calling the transaction an initial currency offer, or “ICO,” or a sale of a “token,” will not eliminate it from the scope of the US securities laws. UU
Decentralization is a big part of determining what a token is, according to Hinmann. If a network is truly decentralized, it can be difficult to distinguish a specific issuer or promoter. He explained:
And then, when I see Bitcoin today, I do not see a central third party whose efforts are a key determinant in the company. The network in which Bitcoin works seems to have been decentralized for some time […] and set aside the fundraising that accompanied the creation of Ether, based on my understanding of the current state of Ether, the Ethereum network and its structure decentralized, current offers and Ether sales are not securities transactions.
This statement can be interpreted as good news. Bitcoin and Ether are the two most popular cryptocurrencies, and a security rating from the SEC could have led to a huge sales frenzy. It would also have launched exchanges and markets in confusion as they struggle to comply with the new regulations.
Coinbase has recently begun the process of becoming a stock exchange registered with the SEC. Now with this announcement, the measure could potentially open hundreds of new tokens for investors to trade.
Hinman included two sets of questions for his audience. While “not exhaustive”, they are likely to provide the most information on the regulatory approach of the commission on digital assets:
The difficult thing is not to learn, the difficult thing is to know how to teach.
Editor and coordinator of the free book “La era de las BLOCK punto COM”
CEO of bitcoiner.today