For the SEC Ethereum is not a security
Crypto

For the SEC Ethereum is not a security

By Rossana Prezioso - 15 Jun 2018

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For the SEC Ethereum is not a security, the wait was nerve-wracking, but in the end, the US authorities decided that Ethereum could not be treated as a financial product.

For the SEC Ethereum is not a security: Leggi qui l’articolo in Italiano

Official confirmation

William Hinman, Director of the Corporate Finance Division of the SEC, confirms this: Ethereum is not classified as security according to its structure.

In determining whether cryptocurrencies and ICOs can be securities or not, the SEC has considered the expectation of an economic return, in particular, the presence of a person or group sponsoring the creation and sale of the asset, or playing a significant role in its development.

Central to determining whether a security is being sold is how it is being sold and the reasonable expectations of purchasers. When we think of Ethereum as currently conceived, we see a highly decentralized network, not the highly centralized subject that characterizes securities.”

In other words, the network referred to by ETH is not centralised.

The issue of securities

This was enough for the market to fly and go up about 10% after some particularly difficult stages.

The question of the true nature of cryptocurrencies, in particular of Bitcoin and Ethereum, dates back a long time, to when Ethereum itself was targeted by the US federal supervisory authorities.

On that occasion, the virtual currency was defined as “in a grey zone of regulation”.

In fact, the first ETHs were distributed in 2014 during one of the first ICOs in history: the US regulator had to determine whether this sale had been a sale of financial products or not since the proceeds, and therefore the funds obtained from the sale, have been used for the development of the platform.

The very fact that many have purchased tokens has led to the presumption of a willingness to speculate for a future revaluation of the product purchased.

Hence the question: can Ethereum and similar be judged as securities or financial products?

The classification of Ethereum as a security would have meant that the product would have to be registered with the SEC, but with today’s decision this has been avoided and the market has benefited.

Rossana Prezioso
Rossana Prezioso

Passionate about the new frontiers of online publishing, she decided to further deepen her knowledge by dedicating herself to the study of cultural and economic changes derived from the emergence of hi-tech finance, developing the themes concerning new business models related to it and the geopolitical influences of the new cryptocurrency economy.

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