SEC Says Ethereum is πŸ‘Œ

To subscribe to this newsletter, click here. To tweet out about the newsletter, click here.

SEC announces cryptocurrency ether is not a security

What's the Story?

  • SEC official, William Hinman, stated Ethereum isn't a security
  • A token can start as a security, but then evolve into a non-security
  • SEC will not change security laws to fit digital assets, but rather "apply" current laws

Why Does This Matter?

Most of Mr. Hinman's testimony today was previously known via statements from Jay Clayton, the SEC chairman, with the exception that Ethereum isn't a security. The market reacted very positively to this statement, but it isn't that definitive. Hinman is only one official at the SEC, saying this. Even if this is the SEC's position, what is the court's opinion? There is no case law to back up this statement. While this is a bullish statement for the cryptocurrency markets especially Ethereum, it would be more bullish for case law to reflect this position and/or a new law to define security laws around tokens explicitly. There is still way too much vagueness around what constitutes a security in the cryptocurrency world. I'm no lawyer, but my understanding is pretty much all ICOs are securities. I don't see many tokens having a future as the SEC will be pursuing civil cases against most tokens,