[td_smart_list_end]Investors of Ether breathe a sigh of relief when a top official from SEC said that transactions relating the token were not subject to federal securities rules, ending months of mystery that had to loom over Ether second-most valuable digital currency. Ether and other coins surged on the news.
SEC clears stance, relief for major altcoins
Crypto investors have been apprehensive for a long time that the SEC would bring regulation on Ether, which was first provided in 2014 by the Ethereum Foundation, a Non-profit organization based out in Switzerland. It’s now widely used in new crypto projects to place their token, across the world. If regulated, It would not only disrupt Ether but also the projects associated with it.
While the SEC has previously given indications that it didn’t consider Bitcoin a security, it had been silent on other cryptocurrencies. The concern, in particular, had mounted around Ether due to its widespread use and because the Ethereum Foundation initially sold it in a manner which resembled as securities offerings.
William Hinman, who heads the SEC’s division of corporation finance, was quoted at a Yahoo Finance conference in San Francisco saying…
“Putting aside the fundraising that accompanied the creation of Ether, 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,”.
“And, as with Bitcoin, applying the disclosure regime of the federal securities laws to current transactions in Ether would seem to add little value.”
Also, read: Cryptocurrency Regulations in June Says Financial Action Task Force (FATF)
Ripple and ICO’s still in consideration
Ripple’s XRP token, the third most valued digital coin, also turned into the green on major exchanges even though Hinman’s comments suggest the SEC might deem it subject to the agency’s rules. While Ripple has made it clear in the past that XRP tokens aren’t securities, many analysts believe that the company’s centralized nature and control over the coins could put it under the SEC’s jurisdiction.
“Is there a person or group that has sponsored or promoted the creation and sale of the digital asset, the efforts of whom play a significant role in the development and maintenance of the assets and its potential increase in value?”
Hinman asked. If so, it might be a security, according to Hinman, who hinted but did not directly name Ripple.
Although Ripple was very positive that it too would pass the Litmus test of the SEC of not being classified as security According to Tom Channick, Ripple’s spokesman quoted by Bloomberg said…
“We are pleased that the SEC has announced that it does not view Ether as a security,”
“We believe that XRP likewise should not be classified as a security and look forward to confirmation from the SEC.”
On ICO’s Hinman in his speech clarified that the SEC hasn’t changed its opinion on initial coin offerings, in which companies raise money through sales of digital tokens.
For now, it’s a relief for Ether stakeholders and the joy was clearly seen in the price spikes. But will this freedom provided by SEC continue for Ether and other Altcoins or will it change stance again once these tokens acceptability increases in the real world? Do let us know your view on the same