For a long time, there has been a call for a clear regulatory framework for cryptocurrencies. The U.S. Securities and Exchange Commission has been focusing on tokens that fall into the security category but, until now, has not given any clear definition of token securities. Today’s cryptocurrency news is about the first ever SEC cryptocurrency token and guidance and how it affects the XRP SEC saga and the ETH SEC saga. The Guidance, per the report on CoinDesk, was released yesterday.
Cryptocurrency News: XRP News – XRP SEC Saga – ETH SEC Saga – SEC Provides Some Clarity
The token guidance from the SEC focuses on the security classifications of tokens. What this means is that it outlines the possible circumstances in which it may view a given token as a security. The XRP army has been waiting for a day when the XRP SEC saga will be put to rest. Even the Ethereum community has been expecting this day. However, the SEC still didn’t clarify the issue of security tokens. How so?
Ethereum (ETH) Price Today – BTC / USD
A while ago, William Hinman, the Director of Corporation Finance at the SEC, said that they were working on formulating new regulatory guidance for cryptocurrency tokens. Many other agencies confirmed that the SEC was working on such a document. At the time, Hinman said that this document will serve as a guide for investors to help them determine which tokens are securities. This is why it contains details of what falls under the securities category and what doesn’t. The document made reference to the Howey Test that has been used by regulators to define securities for many years now.
XRP News: What Does This Mean For XRP,ETH And Other Tokens
The new guidance leaves many questions unanswered so it doesn’t solve the XRP SEC saga or the ETH SEC saga. Rather than use a new method of definition, the SEC decided to use the old Howey test which wasn’t even updated to suite the unique nature of cryptocurrency assets. It didn’t explain active participants impact the cryptocurrency projects, how startups that aren’t based in the United States would be affected, and under what circumstances tokens will no longer be classified as securities.
Well, the good news is that even if this new guidance leaves many questions unanswered, it is still a step in the right direction and it is better than nothing at all. Hopefully, it would be updated in the future to put this XRP SEC saga to rest ones and for all. For now, investors and exchanges have no choice but to wait and see how it all plays out. XRP is doing well per adoption and price movement. The more the SEC delays in creating a clear regulatory framework for tokens, the more successful the industry will become. Rather than worrying about the XRP SEC saga or the ETH SEC saga, it’s better to enjoy the flow in the market one day at a time.
For more details about the DLT framework by CoinDesk, click here.
What do you think about the cryptocurrency news today. Is the SEC ever going to provide enough clarity for cryptocurrencies? Share your thoughts in the comment section.