SEC: Ether Not a Security

| Publish date: 06/16/2018
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According to the Director of the Division of Corporate Finance at the SEC (Securities and Exchange Commission), William Hinman, Ether transactions are not securities transactions. Speaking at a Yahoo! All Markets Summit conference in San Francisco, Hinman stated that based on his understanding of the current state of Ether, its network as well as its decentralized structure, sales and offers of the token are not securities transactions.

What’s The Big Deal?

For the last year or so, the US authorities have been coming down hard on the cryptocurrency industry, with the SEC stating that all cryptos – by their very definition – are securities, and are therefore running afoul of the law.

This statement by the director of the SEC now implies that the world’s second biggest cryptocurrency network is not currently on the wrong side of the law. Another implication of this statement is that the US authorities may be softening their stance towards cryptocurrencies in general.

While the entire crypto community is abuzz with commentary, there have been mixed reactions to this statement. Advocates of the industry are saying that this was an affirmation of their stance on securities laws.

However, legal experts who were actually expecting the SEC to take stronger measures to bring order to the chaos in the cryptocurrency industry through proper regulations were taken aback by this statement. According to UK lawyer and crypto entrepreneur, Preston Byrne, the SEC had just abdicated its responsibility with regard to enforcing securities laws in the US.

The price of Ether surged as soon as news of this statement was released. According to data from Coinmarketcap.com, the altcoin’s token price shot up by 8.8% at that time. And since most other coins are currently issued from the Ethereum platform, they too saw gains in their prices yesterday.

Paving the Way for Ethereum Futures

Thanks to this announcement, the president of CBOE Global Markets, Chris Concannon stated that the Ethereum futures the company had been contemplating launching since December of 2017 were now a distinct possibility. Concannon said that the new stance taken by the SEC means that the regulatory authority could allow the exchange to add Ether futures contracts to their portfolio of offerings.

CBOE’s president also stated that the exchange was happy that the SEC had clarified its stance on Ether based transactions. This issue had been a key roadblock for Ether futures, which is why the company did not launch futures contracts based on the world’s number two cryptocurrency so far.

CBOE is one of the two traditional options exchanges that trades in Bitcoin based futures contracts.

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