Tanya Abrosimova
Independent Analyst
- 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“I agree with Director Hinman’s explanation of how a digital asset transaction may no longer represent an investment contract if, for example, purchasers would no longer reasonably expect a person or group to carry out the essential managerial or entrepreneurial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.
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