In a turn of events about whether Ethereum (ETH) is a security or not, William Hinman, Director of the SEC’s Division of Corporate Finance, has said Ether will not be regulated as a security by the SEC. Mr. Hinman clarified this on Thursday at the Yahoo Finance All Markets Summit where he said:
“When we think about how ether today is operating, at least, we see a highly decentralized network, not the type of centralized actor that characterizes securities offerings. In its current state, we don’t see value regulating it.”
However, his comments did not extend further to ICOs built on the Ethereum platform as well as other ICO capable blockchain platforms. His clarification was only towards Ethereum. This means that some ICOs might fall under the scrutiny and regulation of the SEC at present and in the future.
With Ethereum being announced not being a security, this sets the precedence for the Ripple (XRP) debate as to whether the coin is also a security. This is after a class action lawsuit was filed on the 3rd of May against Ripple.
Brad Garlinghouse, the CEO of Ripple, has constantly explained why XRP is not a security. In an interview with CNBC, Mr. Garlinghouse said that:
“Whether or not XRP is a security shall not be dictated by one lawsuit. The SEC is the governor of that. I think it is very clear that XRP is not a security. It exists independently of Ripple the company. If Ripple, the company shut down tomorrow, XRP will continue to exist.”
That said, it seems the SEC will have the final say about XRP.
However, the SEC still have to figure out a way of not clashing with Cryptocurrency Crusader, John McAfee. McAfee has vehemently expressed his opposition of the SEC classifying ICOs as securities. He was recently quoted as saying that:
“I will not now, nor will I ever, accept this as a reality. I am submitting, now, to this law, but I will fight with every last breath to ensure that this absurd overreach by the SEC will not stand!! It will not stand!”
All in all, the SEC declaration of Ethereum not being a security is a sigh of relief not only for the Ethereum community but also that of Ripple.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
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