US Securities and Exchange Commission (SEC) President Jay Clayton confirmed that Ethereum (ETH) was not considered security. Although Ethereum was sold through an illegal security offer, the analysis by the regulatory agency confirmed that such and other decentralized crypto coins were not considered as securities.
Jay Clayton, Ethereum-Like Crypto Coins Is Not Securities
There are different virtual currencies in the market analyzed by regulatory agencies around the world. There are several tokens labeled as securities in the area. This time, the SEC President confirmed Ethereum was not security.
Clayton sent a letter to the US US House of Representatives, Ted Budd, who had previously asked the SEC to clarify Jay Clayton's comments that Ethereum was not accepted as security.
Clayton commented on this:
Or Your letter also asks if I agree with certain statements about digital markers in Director Hinman's June 2018 speech. I agree that the analysis of whether a digital asset is offered as security or not is not static and that the device is definitely not strict. A digital asset can initially be offered and sold as a security because it is in accordance with the definition of an investment contract, but this assignment may change over time. "
He later went on to say that director Hinman agreed that his virtual currency would no longer represent an investment contract. In this case, he explained that buyers do not expect an individual or a group to carry out the necessary managerial or entrepreneurial efforts. In this case, this asset cannot be considered as an investment contract under the Howey framework.
In 2018, Hinman announced that a crypto currency, such as Ethereum, could be distributed with a first-ever money offer (ICO), which is often considered as Securities. Nevertheless, as time passed, Ethereum became decent enough to avoid being considered a security under the Howey test.
Ethereum is the second largest digital asset on the market after Bitcoin (BTC). It has a market capitalization of $ 14.15 billion and each ETH can be purchased for $ 134. Bitcoin was also considered a commodity by the US Commodity Futures Trading Commission (CFTC). In this way, Bitcoin was placed in the same category as gold.