Thursday, 14 June 2018 19:20

Ethereum and Bitcoin Not Securities, All ICOs Not in Clear

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U.S. SEC Director of Corporate Finance, William Hinman announced on the Thursday, the 14th of June 2018, that the SEC will not be classifying Bitcoin and more importantly Ethereum as a security.

There has been large uncertainty in the market regarding Ethereum and the danger that it might be labeled a security at some point in the future. This seems to know be settled as he stated that the main reason was that Ethereum is a decentralized network. Hinman furhter said that there is no 3rd party taking profit off of it and that the SEC see it more like a commodity like gold and silver.

"Based on my understanding of the present state of ether, the Ethereum network, and its decentralized structure, current offers and sales of ether are not securities transactions," Hinman said.

ICO’s and Centralized Networks

It was not all good news as the SEC head did indicate that not all ICOs would be classified as securities but that many might be in the future. This means that there will be some uncertainty in the market which ICOs are safe and whic are not. XRP is one of the coins that might be classified as a security which would have a massive effect on the market. XRP is one of the biggest blockchain companies in the space (Market Cap: $21,915,672,419) and a negative outlook for the company would be devastating.

Is This the News that Breaks the Bear?

The cryptocurrency market reacted positively to the news with a 9% spike in Ethereum after the announcement. The rest of the crypto market rallied with bitcoin reaching $6650 shortly thereafter.

The bears seems to be losing steam but one would have to see strong support at $6800 before truly calling this a bullish change. We are certainly not in the clear yet but we might be on the cusp of the next bitcoin and altcoin run if the bulls win out.

What is a 'Security'

“A security is a fungible, negotiable financial instrument that holds some type of monetary value. It represents an ownership position in a publicly-traded corporation (via stock), a creditor relationship with a governmental body or a corporation (represented by owning that entity's bond), or rights to ownership as represented by an option.” Source: Investopedia

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