SEC Announces Bitcoin and Ether Aren’t Securities
The SEC’s Bill Hinman Becomes Crypto Hero of the Day By Saying Bitcoin and Ethereum Are NOT Securities
The SEC’s Bill Hinman officially announced that Bitcoin and Ethereum are not securities. That hints that Ripple and other top coins like TRON and NEO may not be securities either. However, Hinman noted that many ICOs are securities.
This is big news, and the market rightly rallied over it. After-all, to confirm that the top two coins are for sure not securities ensured the future of crypto in a way that few announcements could (as this was one of the biggest questions of 2018… and the crypto community got a positive answer; yay!)
This though isn’t perfect news though, as Hinman didn’t specifically say what is going to happen with Ripple, EOS, TRON, NEO, and other top coins that started life as ICOs and/or have odd mechanics for the way they were originally sold.
The reality is that about 1/2 of top coins started life as ICOs, spit out ICOs, or in a grey area for another reason, so there is still a really big question here. That question is, “will the same logic that applied to Bitcoin and Ethereum apply to all the top coins… are they grandfathered in?”
That covered, there is one last bit of murkiness here. That is something that Hinman acknowledges essentially. That is, “how exactly are we supposed to figure out which ICOs, existing or new, are securities?”
The answer given is that the SEC will help ICOs to figure it out, but that the exact rules can be a little unclear. Essentially though it has to do with how funds are raised and how things are presented to investors (do investors expect to profit?)
With UKG (an ICO), they made it clear that UKG was not meant as investment… but is that enough to save it? Meanwhile other ICOs that have suggested that investors would expect returns are almost certainly destined to be regulated.
BOTTOMLINE: This is great news for Bitcoin and Ether. We all sort of figured that Bitcoin was safe, but I was personally worried about Ether. Meanwhile, this is potentially good news for other top coins, as it suggests that since Ether is safe, they probably are too (at least the odds of that have now increased substantially). However, in general, Bitcoin and Ether aside, we 100% need more clarity as investors so we can better understand the extent of the impact of existing and new ICOs being securities. Does this change how taxes work? Are there other rules we have to follow? Etc. We will keep you updated. For now. PHEW!
- Bitcoin and ether are not securities, but some initial coin offerings may be, SEC official says. CNBC.com.