Blockchain Lawyer Clarifies Recent SEC ETH is a Non-Security Statements as Community Awaits Ether’s Fate
Recently, Coin Center worked with Representative Ted Budd to send a letter to SEC Chairman Clayton. The letter asked for clarification regarding Clayton’s position on Director Hinman’s June 2018 speech on ethereum and other cryptos are securities.
Clayton responded, stating, in part
“I agree that the analysis of whether a digital asset is offered or sold as a security is not static and odes not strictly inhere to the instrument. A digital asset may be offered and sold initially as a security because it meets the definition of an investment contract, but that designation may change over time if the digital asset is later offered and sold in such a way that it will no longer meet that definition. I agree with Director Hinnman’s explanation of how a digital asset transaction may no longer represent an investment contract if, for example, purchasers would no longer reasonably expect a person or group to carry out the essential managerial or entrepreneurial efforts. Under those circumstances, the digital asset may not represent an investment contract under the Howey framework.”
The full response letter can be read here.
The reactions to Clayton’s letter are mixed. Experts have already started arguing that the letter’s contents were not worth much and that it cannot be used as an official stance on whether cryptocurrency is security. Marco Santori, an industry lawyer stated,
“Did clayton endorse the SAFT framework? (No). Nor did he say that Ether is not a security. Words have meaning though, and so does diction. It’s tough to ignore these letters and everything that goes into them.”
Santori also mentioned that the letter represents, “predictive value” under current conditions. As for Coin Center, its lead Jerry Brito replied and thanked Clayton and Hilman for their “thoughtful approach” to the issue.