If SEC Exempts Bitcoin and Ether From Security Laws, Which Cryptocurrencies Will Be Regulated?

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The name, William Hinman, has been trending in the cryptoverse since on Thursday after he made a comment regarding the SEC’s opinion on cryptocurrency regulations. According to Hinman, Ether and Bitcoin will not come under regulatory scrutiny and would not be treated as securities. However, some other cryptocurrencies will fall under this category. The question everyone is too excited to ask is which cryptocurrencies will be classified as securities?

What is a Security?

A security can be referred to as an investment product that involves risks and can be exchanged for value. Not every investment is referred to as a security. For an investment to qualify as a security it must be readily available for transfer between two parties and the owner of the investment must be ready to lose all or some of the principal at any time. It must be a monetary investment and the money must be kept with a common enterprise. There must be an expectation of profit which must come from the sole effort of others.

Which Cryptocurrencies are Most Likely Securities?

William Hinman made it clear that Bitcoin and Ether will not be classified as cryptocurrencies but did not specify which cryptocurrencies will be affected by the regulations. Considering the guidelines of the SEC, cryptocurrency platforms that fall into the category of securities will need to register with the SEC and follow all the regulations that cover other typical securities. If they do not register and follow security laws, their cryptocurrency assets can be confiscated by the United States government.

Some of the coins that may be regulated like securities include: NEO, TenX (PAY), and, Aragon (ANT). The SEC hasn’t officially listed these coins or any other coin but from the definition and characteristics of a security, these coins are the ones that are most likely to fall into the category.

With time, more clarity will be offered by the SEC and all the cryptocurrencies involved will know the next step to take.

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