On the heels of a 25% rout the previous week, the U.S. government finally provided comments regarding regulatory clarity for Ethereum (ETH). The comments were interpreted immediately by the market as bullish.
The market cap now stands at US$49.12 billion, with exchange-traded volume of US$1.25 billion in the past 24 hours. Yesterday, William Hinman, the Director of Corporation Finance at the U.S. SEC, gave a speech at the Yahoo Finance All Markets Summit in San Francisco. The discussion was specifically focused on determining whether or not crypto assets are securities.
Hinman specifically commented on Bitcoin and ETH as not representing securities, citing the decentralized nature of both networks. “And 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.” Current SEC chair Jay Clayton has already said, “I believe that every ICO I have seen is a security,” and has implied that ETH is not a security, although ETH did have a token sale of its own in 2014.
Hinman went on to say that enterprises, or ICOs, created and developed by a third party with an “expectation of a return” for the investor are more likely to represent securities. Regardless of whether an ICO represents a utility token, most ICOs fall under the umbrella of centralized enterprises where profit comes from the efforts of a promoter or third party, as stated in the Howey Test.
2018 ICO StatsSource: coinschedule.com In May, ex-CFTC chairman Gary Gensler had said he believed there was a “strong case” that ETH is a noncompliant security. The comment was responded to by Andreessen Horowitz and Union Square Ventures, among others, who asked the SEC for safe harbor from securities law, suggesting that the law does not apply to ETH due to its decentralized nature. Read more from bravenewcoin.com…
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