SEC Chairman Confirms Cryptocurrencies Like Ethereum Are Not Securities

SEC Chairman Confirms Cryptocurrencies Like Ethereum Are Not Securities

On March 12, the cryptocurrency and blockchain legislative advocacy group Coincenter published correspondence between the Securities and Exchange Commission (SEC) chairman Jay Clayton and representative Ted Budd. The letter explains that Clayton and the SECs staff analysis confirms that Ethereum and similar cryptocurrencies are not subject to securities laws.


SEC Chairman Jay Clayton Agrees That Certain Cryptocurrencies Are Not Securities

It seems the SEC chairman Jay Clayton agrees with the agencys head of the Division of Corporate Finance, William Hinman. Last July, news.Bitcoin.com reported on Hinmans opinion that that cryptocurrencies like BTC and ETH are not securities. If the network on which the token or coin is to function is sufficiently decentralized then the currency is likely not a security explained Hinman during the Yahoo All Markets Summit. So a few months ago, the blockchain legislative advocacy group Coincenter sent a letter co-signed by representative Ted Budd that asked the SEC chairman if he agreed with Hinmans valuation.

I agree with Director Hinmans explanation of how a digital asset transaction may no longer represent an investment contract, Claytons response read.

The SEC chairmans letter continued:


Clayton Has Given His Opinion Before

Clayton didnt mention which specific cryptocurrencies met this criterion, but Coincenters published blog post suggests that the letter is a confirmation that Ethereum (and cryptos like it) are not securities. Coincenters founder Jerry Brito thanked Budd for helping reach out to the SEC chairman. Thanks to representative Ted Budd for his leadership getting regulatory clarity for cryptocurrencies, Brito tweeted on Monday.

Claytons statements to Coincenter and representative Budd echo prior statements he made in June 2018 during an interview with CNBC. During that conversation, the chairman spoke specifically about bitcoin.

Replace the dollar, the yen, the euro with bitcoin That type of currency is not a security, Clayton stated at the time. Where I give you my money and you go off and make a venture [] and in return for me giving you my money, you say, You know what, Im going to give you a return. That is a security, and we regulate that. We regulate the offering of that security, and we regulate the trading of that security.

However, Clayton had a different opinion about initial coin offerings (ICO) that have raised billions in the last few years. During a speech last December, Clayton agreed that ICOs were a novel way for entrepreneurs and other businesses to raise capital as long as they follow securities laws. The novel technological nature of an ICO does not change the fundamental point that, when a security is being offered, our securities laws must be followed, he said.

It seems that networks like Ethereum and Bitcoin do not fall into that category in Claytons eyes as they are sufficiently decentralized. Ripple may not qualify under Hinman and Claytons interpretation however. Ripple faces a class-action lawsuit where the plaintiffs allege XRP falls under security laws and must be regulated by the SECs framework.


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The post SEC Chairman Confirms Cryptocurrencies Like Ethereum Are Not Securities appeared first on Bitcoin News.

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