Digital currency advocates are celebrating what they regard as a significant step in the right direction in the virtual token ecosystem following the report that a Securities and Exchange Commission (SEC) official contemplated the prospect of striking out or excluding several digital assets or coins from under its oversight.
Since the exponential growth attained in the initial coin offering (ICO) market (which has reportedly raised a whopping 14 billion USD for all Blockchain-powered networks), the United States’ Securities Exchange Commission decided to take a hard route by declaring that any digital asset offered through an ICO must be regarded as a security. This is subject to the already existing laws regarding disclosures and investor protections provided by the law.
What We Know So Far
At a San Francisco conference, the SEC’s cooperate finance director, William Hinman, spoke about a distinction between original cryptocurrency issuance via ICO’s and additional virtual currencies created later, when it doesn’t necessarily offer any benefits to the original backers. Hinman spoke on the growth of Ethereum and the digital assets associated with it. He talked about Ether’s use has grown from a little group of pioneers to a community of 100,000 developers since 2014. Applying the federal securities laws, Hinman, insisted that there are no “central actors” steering the network’s success.
Negative Reaction From SEC Officials
Although positively received by crypto enthusiasts, some SEC officials insisted that Hinman’s remarks didn’t necessarily indicate the views of the Securities Exchange Commission. However, crypto proponents welcomed the directors choice of words. They bought his suggestions that a time will come in the lifespan of any cryptocurrency that federal or state securities laws won’t relate or guide them anymore.
What matters to them is the fact that Hinman drew a comparison between Ethereum and Bitcoin, which the SEC has backed by saying it won’t be supervising the cryptocurrency as a security. Bitcoin gained 5 percent following Hinman’s remarks, with Ether rising by 15 percent after the comments.