A top official from the US SEC delivered a very important speech regarding digital currencies on the 14th of June in San Francisco. The speech came in the midst of the present uncertainty about the legal status of digital currencies such as Ethereum and Bitcoin.
The remark by the director of the Corporate Finance Division of the US SEC – William Hinman, lifted a legal cloud over bitcoin and Ethereum, while other coins are still in limbo. Based on the conversations with securities lawyers, here are some of the things you should know.
The Speech Is Not the Law – But It Might Be
The US SEC is not likely to embark on a formal rule-making process to define how digital currencies fit into the present framework of securities law – according to Keith Higgins. Rather, the organization will make its position known via enforcement measures and actions just like the speech on Thursday, which was also published on the site of the SEC.
The speech is the most detailed guidance of the SEC regarding digital currencies since a report released in July last year, which concluded that digital currencies that are sold for an automated investment project are securities.
Decentralization Is Key
On Thursday, the values of both Ethereum and Bitcoin increased as Hinman announced that they are not securities. Hinman also said that decentralization is what takes Bitcoin and Ethereum out of the list of security tokens.
Ripple (XRP) Is Still in a Gray territory
XRP, which is the third most valuable digital currency, welcomed the speech as positive news. A spokesman said: “they are pleased that the U.S. SEC has announced that Ethereum and Bitcoin are no longer securities. They believe that XRP should also not be categorized as a security and they look forward to getting a confirmation from the Securities and Exchange Commission.