Ethereum is Not a Security Says SEC’s Chairman: Tune In May 7
The regulatory agencies in the United States – and all over the world – are discussing about how to understand virtual currencies – and it happens to streaming a live feed of a May 7,2018 discussion about Ethereum and its security classification. Are crypto assets securities, commodities or currencies? Well, it depends on the kind of token that we are talking about as well as which governing body is in question.
Moreover, the market has been following very careful how the Securities and Exchange Commission (SEC) could catalogue Ethereum and Ripple. If Ethereum is given the security title, it would have had to register back in 2014 as such and would likely cause a massive chaos should a ruling go against Ethereum and it being considered an illegal securities sale.
Jay Clayton, Chairman of the SEC, said about crypto assets and tokens:
“It’s a complicated area. Because, as you said, there are different types of crypto assets. Let me try and divide them into two areas. A pure medium of exchange, the one that’s most often cited, is Bitcoin. As a replacement of a currency, that has been determined by most people not to be a security. Then there are tokens, which are used to finance projects. I’ve been on the record saying that there are very few, there’s none that I’ve seen, tokens that aren’t securities.”
Following what Jay Clayton says, we should not consider Ethereum as a security. Currently, Ether (ETH) is used as a means of exchange and the founders of Ethereum do not have control over the network. Additionally, the Ethereum’s network handles an important traffic that is linked to smart contracts. Will ETH make it out of the gray zone or will it be classified it as a security under U.S. law?
There is an important thing to note, Matthew Gertler, senior analyst and counsel at Digital Asset Research, wrote that he does not know how ICOs are considered securities but Ethereum is not. Ethereum was born as a crowdsale that some specialists consider it as an ICO while others not.
The debate is not over and there are other virtual currencies being analysed, including Ripple (XRP). Ethereum and Ripple are the second and the third most important cryptos in the market and how they will be considered by the US law it is a very important matter to cryptocurrency enthusiasts, developers and investors.
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