Kyle Samani, a managing partner with the crypto hedge fund, Multicoin Capital, insists that the majority of the top 100 virtual currencies could be termed as securities, despite the SEC’s Director’s statement this Thursday. Samani, in a Tweet, discussed the guidelines set out by the SEC.
How This Affects Hinman’s Remarks
William Hinman, the Securities and Exchange Commission’s cooperate finance director, was tasked with revealing the agency’s stance regarding cryptocurrencies.
Hinman stated that a digital asset could not be regarded as a security. However, considering it a security can depend on how its creators choose to handle its advertising and sales. Digital currencies that depend on an identifiable group or individual to succeed in the endeavor will be considered as securities which is different from genuinely decentralized assets that no singular entity can control.
Samani and Hinman both agree that the features of Bitcoin and Ethereum imply that they are not securities.
Hinman went on to release a list of questions that will help distinguish utilities from security tokens. In cases where the promoters of the token raise too much funds than what necessary, their team should be held accountable. If there isn’t any explanation given, a red flag should be raised somewhere according to the official.
Samani indicates that been “sufficiently decentralized” may not be a quantifiable measurement for a non-security and could result in ambiguity. Hinman’s points out the same. He states that analysis aren’t permanently set and could be altered at any moment. Let’s take an example, if an individual places Bitcoins in fund raising and sells interests, this product could be regarded as a security.
Samani also indicates that, looking at the SEC’s guidelines, that the complete implementations by independent teams is a single valid metric which may be used to decide if an asset is decentralised. Following this logic, apart from Ether and Bitcoin, Bitcoin Cash, Litecoin, and Ethereum Classic might be the only assets of the top tokens in the clear.