The world’s second-most popular cryptocurrency isn’t an investment vehicle, at least according to the Securities and Exchange Commission. William Hinman, the agency’s director of the division of corporate finance, said Thursday that ether—the currency that powers the Ethereum network—shouldn’t be regulated in the same way as stocks and bonds.

His statements follow similar ones made in April by SEC chair Jay Clayton about bitcoin. Taken together, the two sets of remarks provide the clearest understanding of how the regulatory agency views the cryptocurrency market.

In essence, when a cryptocurrency becomes sufficiently decentralized, as the widely popular bitcoin and ether have, the agency no longer views it as a security. In contrast, smaller initial coin offerings, or ICOs, are almost always securities in the SEC’s eyes.

That distinction matters, because securities are subject to the same regulations as normal stocks. “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,” Hinman said at Yahoo’s All Market Summit: Crypto in San Francisco.

“And, as with bitcoin, applying the disclosure regime of the federal securities laws to current transactions in ether would seem to add little value.” ‘Current offers and sales of ether are not securities transactions.’ Read more from wired.com…

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