According to William Hinman, the SEC doesn’t consider Ethereum’s native cryptocurrency a security. In Hinman’s words:
“According to my understanding regarding the current state of Ethereum, the networks decentralised structure, and offers, as well as sales, are not securities transactions.”
Hinman, who serves as the corporate finance director of the SEC made these comments at the San Francisco Markets Summit event yesterday. And as anticipated the online crypto community exploded following the comments. The overall consensus about Hinman’s remarks is positive.
The Implications of Hinman’s Comments
Hinman’s remarks mean that Ether isn’t running against the law and that the Securities and Exchange Commissions is preparing to soften its resolve to the crypto token sector in general which may be a tip of the iceberg. Following the revelation, blog posts began to pop up relating to the subject.
Crypto advocates took it as a confirmation of their views regarding the securities issue. Legal experts who had anticipated a different outcome from the SEC’s deliberation on the subject were more bewildered.
According to Preston Byrne a UK based entrepreneur and lawyer:
“The Securities and Exchange Commission has abdicated responsibility for the enforcement of securities laws in the U.S,”
However, the actual ramifications of the comments aren’t known fully.
Hinman’s statements, seem instructive though but doesn’t necessarily represent a ruling by the commission.
Byrne pointed out to crypto investors that it may still be too early to rejoice over the comments. However, the crypto community on Twitter didn’t pass the opportunity to celebrate the win a sentiment hugely influenced by market dynamics following Hinman’s remarks.
Ether’s price surged immediately the news came to light by 8.8 percent, as did many other top digital coins. This doesn’t come as a surprise given the fact that most tokens are issued on top of the Ethereum Blockchain in the current atmosphere.
Even the price of Bitcoin skyrocketed as a result of the news, a development that halted what was otherwise a dreadful period for cryptocurrency markets.