The Confirmation Ethereum Is Not A Security Have Been Stated By SEO Chairman Jay Clayton
Jay Clayton is the Chairman of the Securities and Exchange Commission. He has formally stated decentralized cryptocurrency such as Ethereum are not securities. If these assets were sold as an illegal securities offering, they are still not securities. This revelation was made by Clayton to United States House Representative Ted Budd in a letter. The representative had requested clarity from the SEC regarding a statement made by William Hinman, the Division of Corporate Finance SEC Director. Hinman wanted to know if he was speaking for the agency or stating his opinion when he said Ethereum was not a security.
Although the crypto news did not specifically mention any cryptocurrency by name, Clayton confirmed he was in agreement with the analysis of Hinman regarding which crypto assets are under the classification of securities. Director Hinman gave a speech pertaining to crypto regulation in June of 2018. He agreed analyzing digital assets sold or offered as a security were not static. He said even if a digital asset is offered or sold as a security because it is defined as an investment contract, does not mean the digital assets cannot change as time passes. This can occur when the changes involve selling or offering the digital currency in a manner not meeting the definition.
Clayton agreed with the explanation provided by Director Hinman defining how a transaction involving digital currency may stop representing the investment contract. A good example of Altcoin news is a group or purchaser of cryptocurrency no longer expected to continue with the entrepreneurial or managerial efforts by the purchaser. These circumstances demonstrate the asset no longer represents an investment contract according to the Howey framework. Crypto news has covered the statement Jay Clayton made on regarding the adoption of Ethereum on Wall Street.
Crypto regulation has become complicated since assets including Ethereum were originally distributed through an ICO or initial coin offering. A report made by CNN in 2018 stated when Etherium was first issued, it might have been a security. As time has passed, cryptocurrency has become decentralized. Factors occurring after the initial launch have introduced new currency units using mining as opposed to token sales. Until recently, it was unclear if Hinman was communicating his personal views or the official policy of the SEC. Clayton previously stated he did not classify Bitcoin as a security. He declined to speak of other assets such as Ethereum.
This distinction is critical. Ethereum would most likely have been removed from the United States cryptocurrency exchanges due to the potential securities classification. In the past, the SEC issued a warning there would be repercussions for an exchanges listing illegal securities. Regulatory clarity was increased and may lead to institutional adoption. Altcoin news has focused on the questions surrounding the legal status of cryptocurrency. This is just one of many roadblocks convincing numerous institutions to become more active in the world of crypto.
Marco Santori is the CLO and Blockchain President as well as a crypto lawyer. He has warned the enthusiasts of cryptocurrency not to read too deeply into the letter written by Clayton. This is based on the repeated statements of the SEC Chairman agreeing with the analytical model of Hinman, but not specifically addressing the application of the model. Santori stated it would be legally binding to outright say Ethereum could not be considered a security. He also stated this is not what the SEC is trying to say. He speculated the SEC is not agreeing with the indications of the letter that Etherium is not a security, while not saying it is a security either.