The head of the US Securities and Exchange Commission confirmed that Ethereum is not a security
|- The SEC confirmed that ETH is not a security.
- ETH/USD is rangebound with bearish bias.
The Chairman of the Securities and Exchange Commission (SEC) Jay Clayton believes that the second largest cryptocurrency cannot be considered a security, The Block reports.
“Token is offered or sold as an investment contract, and therefore is an offer or sale of a security.” Whether a crypto asset is a security depends “on the facts and circumstances, including the economic realities of the transaction,” Clayton explained.
Basically, no sensation here as in summer 2018 the head of the SEC’s Corporate Finance Department William Hinman also said that Ethereum did not contain features typical for securities.
“I agree with Director Hinman’s explanation of how a digital asset transaction may no longer represent an investment contract if, for example, purchasers would no longer reasonably expect a person or group to carry out the essential managerial or entrepreneurial efforts. Under those circumstances, the digital asset may not represent an investment contract under the Howey framework,” Clayton said.
Meanwhile, back in 2018 SEC published a letter where it was stated that the status of a digital asset was not static, and could alter over time.
“A digital asset may be offered and sold initially as a security because it meets the definition of an investment contract, but that designation may change over time if the digital asset later is offered and sold in such a way that it will no longer meet that definition,” Clayton added.
Thus, a digital asset can be issued and sold as a security, but later on, sold and used without investment features.
Meanwhile, Ethereum is changing hands at $133.19, mostly unchanged since this time on Tuesday. The second largest digital asset has been rangebound with bearish bias ever since it broke below $135.00. The next important support level $130.00 may be retested again as the intraday RSI looks downward.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.