Topic: SEC announces that ETH is not a security - page 2. (Read 1800 times)
Does this mean good news for bitcoin and ethereum?. If ethereum is not a security, does it mean ethereum tokens should not be referred to as securiries too?
As for me, this is a sign that the crypt is beginning to be recognized and perhaps at least somehow trying to make it more predictable.
I am not a specialist in the field of security so I am confused a little but I do not think that it is a tragedy because every complicated facility has defects and there is the reasonable question when developers will solve this problem.
Moreover I think that this trouble is not so awful because there are not news in mass media about this problem.
Moreover I think that this trouble is not so awful because there are not news in mass media about this problem.
I believe his speech was not necessarily so positive because, on the other hand, the director stated everything you put money with intention to sell higher is a security, so everything else can be a security.
ETH is the one of the successful coin in crypto market and this type of news seen on BTC also but still BTC running successfully same ETH also run future successfully still now more ICOS depended by EHT
So like I said: If Ethereum came out today, it would be deemed an illegal security by US law.
I guess Ethereum holders lucked out with this one. I guess they did this to not screw up the current market, but I also think someone with SEC influence is bagholding ETH and this was in their interest.
At the end of the day they are screwing up the people that could get rich from investing in something very early to save the idiots that cannot do research. Once again government regulators screwing up those that put the work (to do the research) vs these that don't put the work and invest in obvious scams such as Bitconnect
This is the unfortunate aspect of the law.
And, the unintended consequence is many of blockchain projects will move outside of the United States so that they can raise capital prior to Network Launch.
I am very interested in what consequences this statement of the SEC can bring? Will this affect the ethereum in the negative or not?
This will likely affect the price of ETH. Now news is what determines the price of the market. But I do not believe that the SEC's statement on ETH is true. They may have misunderstood the features of ETH
News was just announced and prices have already skyrocketed. What are you thoughts on this?
Well, I don't participate in ICOs since I live in the US, but I do find this news interesting. All of the financial press I follow have been mentioning crypto in the past year or so, so it has taken off. I would not have predicted this level of popularity a couple of years ago, but here we are.It's particularly interesting that they don't view ETH as a security. Isn't bitcoin considered a security in the eyes of the IRS? If I'm not mistaken, they don't view it as a currency since you have to pay capital gains taxes on it. Anywho, it's just as well that I can't participate in ICOs. I believe the vast majority of them are just useless cash grabs, and some are plain scams.
As far as I know the IRS can't have an independent opinion against what the SEC says. The SEC claimed Bitcoin isn't a security (it obviously never was), so the IRS task is to guarantee people pay taxes, not to argue about the SEC what Bitcoin or whatever else is. They just want your tax money and will follow guidelines set by SEC to determine what all these new things are.
But even if the SEC said Bitcoin was a security, it would just mean they are wrong. The government isn't infallible and can take stupid decisions, thankfully at least they didn't screw up with Bitcoin.
It is a good news for the industry. And I agreed with the statement and found market up. I agree that Bitcoin and ETH are not security. They are performing like securities but not exactly that. There are so many differences between stock and cryptos.
Maybe it's a good news. But it didn't any influence on the market. Nothing. BTC and ETH prices did not change. I think people afraid any cryptocurrencies after such dumping. More than 3 times for some coins. And now only stable uptrend can help to be glad
It is a good news for the industry. And I agreed with the statement and found market up. I agree that Bitcoin and ETH are not security. They are performing like securities but not exactly that. There are so many differences between stock and cryptos.
I feel the governments and SEC are trying everything possible to bring a crackdown on cryptocurrency in general, but which will all amount to futility. My question to them is that; what makes something a security and why should Ethereum that is seen as one of the most successfulaltcoin in the crypto space be seen a s a scam?
I am of the opinion that indeed blockcchain technology is not yet fully in use and there is still much better potential.
and now there are a lot of coins scattered in the market that makes investors split and again a lot of scams happen.
investors need more security and not just gambling speculation and I agree with the steps of the SEC.
and now there are a lot of coins scattered in the market that makes investors split and again a lot of scams happen.
investors need more security and not just gambling speculation and I agree with the steps of the SEC.
From The CryptoGraph
News was just announced and prices have already skyrocketed. What are you thoughts on this?
Quote
The SEC’s leader on cryptocurrencies and initial coin offerings (ICOs) says that Bitcoin and Ether are not securities but that many, not all, ICOs are securities and will come under the regulatory control of the SEC.
“Central to determining whether a security is being sold is how it is being sold and the reasonable expectations of purchasers,” William Hinman, head of the Division of Corporate Finance for the SEC.
Hinman noted that the central issue in determining whether cryptocurrencies and ICOs were securities was the expectation of a return by a third party, specifically whether there was a person or group that sponsored the creation and sale of the asset, and who played a significant role in its development and maintenance. If consumers are promised or are respecting an appreciation in value, and there is a centralized third party, then it can be classified as security according to Hinman.
Hinman specifically said that Bitcoin is not a security because it is decentralized: there is no central party whose efforts are a critical determining factor in the enterprise. Likewise, Ethereum cannot be considered a security because the Ethereum network is decentralized.
Mr. Hinman did not address the securities status of other cryptocurrencies, like Ripple (XRP), which is on the wrong end of a lawsuit alleging that it is a security. Additionally, a platform like EOS, which is controlled by Block.one, seems to be a likely contender for securities regulations. EOS’s system of validation, which delegates power to only 21 nodes, may not be enough decentralization in the eyes of the Securities and Exchange Commission.
Investors have eagerly been awaiting this decision, and we can all breathe a sigh of relief that the SEC continues to favor fair regulation and encourage innovation. Security regulations in the US are stringent and a securities label could remove many US investors from the global crypto market.
“Central to determining whether a security is being sold is how it is being sold and the reasonable expectations of purchasers,” William Hinman, head of the Division of Corporate Finance for the SEC.
Hinman noted that the central issue in determining whether cryptocurrencies and ICOs were securities was the expectation of a return by a third party, specifically whether there was a person or group that sponsored the creation and sale of the asset, and who played a significant role in its development and maintenance. If consumers are promised or are respecting an appreciation in value, and there is a centralized third party, then it can be classified as security according to Hinman.
Hinman specifically said that Bitcoin is not a security because it is decentralized: there is no central party whose efforts are a critical determining factor in the enterprise. Likewise, Ethereum cannot be considered a security because the Ethereum network is decentralized.
Mr. Hinman did not address the securities status of other cryptocurrencies, like Ripple (XRP), which is on the wrong end of a lawsuit alleging that it is a security. Additionally, a platform like EOS, which is controlled by Block.one, seems to be a likely contender for securities regulations. EOS’s system of validation, which delegates power to only 21 nodes, may not be enough decentralization in the eyes of the Securities and Exchange Commission.
Investors have eagerly been awaiting this decision, and we can all breathe a sigh of relief that the SEC continues to favor fair regulation and encourage innovation. Security regulations in the US are stringent and a securities label could remove many US investors from the global crypto market.
News was just announced and prices have already skyrocketed. What are you thoughts on this?
This is a welcome development for the cryptocurrency community because the news information is going to boost the price of altcoins in the market. Such major decisions are so fundamental to the demand and supply curves of the all altcoins in the crypto ecosystem.
Good news, was obvious it's not a security anyway though.
News was just announced and prices have already skyrocketed. What are you thoughts on this?
Well, I don't participate in ICOs since I live in the US, but I do find this news interesting. All of the financial press I follow have been mentioning crypto in the past year or so, so it has taken off. I would not have predicted this level of popularity a couple of years ago, but here we are.It's particularly interesting that they don't view ETH as a security. Isn't bitcoin considered a security in the eyes of the IRS? If I'm not mistaken, they don't view it as a currency since you have to pay capital gains taxes on it. Anywho, it's just as well that I can't participate in ICOs. I believe the vast majority of them are just useless cash grabs, and some are plain scams.
In the early days of Pre-ICOs, such as the Ethereum ICO circa 2014, the offering to purchase rights to tokens were open to anyone. This was a violation of US securities law. It's only recently that the SEC has realized this, and now is enforcing the law. Just ask the folks at Munchee.
The result is for Pre-ICOs organized under US law are no longer open to anyone. This locks out a lot of savvy investors such as blockchain enthusiasts who aren't accredited investors. These investors must wait until Network Launch. At this stage, the ROI is typically dramatically less than early rounds during the Pre-ICO phase. Of course, it's also dramatically less risky thus the lower return.
The result is for Pre-ICOs organized under US law are no longer open to anyone. This locks out a lot of savvy investors such as blockchain enthusiasts who aren't accredited investors. These investors must wait until Network Launch. At this stage, the ROI is typically dramatically less than early rounds during the Pre-ICO phase. Of course, it's also dramatically less risky thus the lower return.
So like I said: If Ethereum came out today, it would be deemed an illegal security by US law.
I guess Ethereum holders lucked out with this one. I guess they did this to not screw up the current market, but I also think someone with SEC influence is bagholding ETH and this was in their interest.
At the end of the day they are screwing up the people that could get rich from investing in something very early to save the idiots that cannot do research. Once again government regulators screwing up those that put the work (to do the research) vs these that don't put the work and invest in obvious scams such as Bitconnect
Here is the key distinction... some cryptocurrencies such as bitcoin and ether can be used as a medium of payment. This means they have inherent value because sellers are willing to trade a cryptocurrency for goods or services. Further, there are currency exchanges that will exchange a cryptocurrency for fiat currency. This means they are liquid.
The is gist of this ruling.
The is gist of this ruling.
No token project at the beginning is going to have liquidity therefore it's not going to be viable as a medium of payment... so any new token from now on is a security if judging by this.
By declaring ICOs a security, it restricts investors residing in the United States to only "Accredited Investors". This means only Accredited Investors may invest in ICOs. That's unfortunate to savvy investors who are quite capable of distinguishing a scam from a legit ICO as well as can responsibility restrict their investment budget, BUT who aren't Accredited Investors.
What's ironic is if Ethereum came out today it would qualify as a security because it would lack the liquidity part which judging by what you said is what made the SEC not count it as a security, so it wouldn't have allowed all these early investors to get rich because im sure 0% of them would qualify as "accredited investors". Most early Ethereum investors im sure were geeky guys that were interested in Bitcoin and browsed this forum looking for the next big thing go make massive gains with since they missed the Bitcoin boat.
As far as US security law, there are two phases of raising capital for a project. The "Network Launch" is what separates these phases. Network Launch by definition is when the the network is operational allowing the public to purchase and use tokens.
Provided there is a use for the token (which, presumably, is what the token designers designed to token to do) the token becomes a utility token, and thus isn't a security according to US securities law, and this announcement confirms the SEC understanding.
Prior to Network Launch there aren't tokens because the network is under construction. In this phase, investors can purchase rights to a number of tokens at Network Launch. These rights are considered securities.
So, an ICO is really organized into two phases:
Pre-ICO - prior to Network Launch
ICO - after Network Launch
In the early days of Pre-ICOs, such as the Ethereum ICO circa 2014, the offering to purchase rights to tokens were open to anyone. This was a violation of US securities law. It's only recently that the SEC has realized this, and now is enforcing the law. Just ask the folks at Munchee.
The result is for Pre-ICOs organized under US law are no longer open to anyone. This locks out a lot of savvy investors such as blockchain enthusiasts who aren't accredited investors. These investors must wait until Network Launch. At this stage, the ROI is typically dramatically less than early rounds during the Pre-ICO phase. Of course, it's also dramatically less risky thus the lower return.
The law surrounding ICOs is new and evolving. Everytime the SEC makes a ruling, it helps attorneys understand the "rules of the game", and in turn help their clients. This is quite helpful.
Here is the key distinction... some cryptocurrencies such as bitcoin and ether can be used as a medium of payment. This means they have inherent value because sellers are willing to trade a cryptocurrency for goods or services. Further, there are currency exchanges that will exchange a cryptocurrency for fiat currency. This means they are liquid.
The is gist of this ruling.
The is gist of this ruling.
No token project at the beginning is going to have liquidity therefore it's not going to be viable as a medium of payment... so any new token from now on is a security if judging by this.
By declaring ICOs a security, it restricts investors residing in the United States to only "Accredited Investors". This means only Accredited Investors may invest in ICOs. That's unfortunate to savvy investors who are quite capable of distinguishing a scam from a legit ICO as well as can responsibility restrict their investment budget, BUT who aren't Accredited Investors.
What's ironic is if Ethereum came out today it would qualify as a security because it would lack the liquidity part which judging by what you said is what made the SEC not count it as a security, so it wouldn't have allowed all these early investors to get rich because im sure 0% of them would qualify as "accredited investors". Most early Ethereum investors im sure were geeky guys that were interested in Bitcoin and browsed this forum looking for the next big thing go make massive gains with since they missed the Bitcoin boat.
This is just proves that ethereum is going to be in here for more than years and that it is accesible to almost everyone on the US and all the other countries . Those are very good news
SEC is one of that fiatwhale supporters that now joined this game to manipulate with crypto price without adding something useful in this field 
They just ban, or allow - but to allow you don't need to be special. For ban also. Useless part in crypto development as for me
Actually, the SEC is quite supportive of blockchain and cryptocurrencies. They are working hard to create the rules that provide the infrastructure that will allow widespread use.They just ban, or allow - but to allow you don't need to be special. For ban also. Useless part in crypto development as for me
These rules are extremely useful.
The SEC's priority is protecting unsophisticated investors who aren't savvy enough to detect ICO scams AND can't afford to lose their money in such scams. There are a lot of ICOs that are scams. So, these "bans" are helpful.
Now, by declaring cryptocurrencies NOT a security, this SEC ruling opens the way for any investor, regardless of their sophistication or ability to afford losing their investment, to buy cryptocurrencies as an investment.
It also opens the ability to use cryptocurrencies as a medium of payment as well as other uses.
That seems quite helpful to crypto development.
By declaring ICOs a security, it restricts investors residing in the United States to only "Accredited Investors". This means only Accredited Investors may invest in ICOs. That's unfortunate to savvy investors who are quite capable of distinguishing a scam from a legit ICO as well as can responsibility restrict their investment budget, BUT who aren't Accredited Investors.
Jump to: