SEC Chairman Clayton: Ether does Not Necessarily Mean Security

A letter from SEC Chairman Jay Clayton suggests that it is not a security from the point of view of the US Securities and Exchange Commission at Ethereum (ETH). The letter supports the attitude of SEC employee William Hinman. During a speech in June 2018, he released ETH from the Damocles sword of security status.

The question of whether ETH is a security or not, seems to have come a little closer to their clarification. Because SEC Chairman Jay Clayton confirmed in a letter of reply that he "agrees with the attitude that the analysis of whether a digital asset is a security or not, depends on the instrument itself." And continues: "Rather, a digital asset Although offered as security [...]. But this status can change over time, so you can no longer define the asset as security. "

In plain language, this means that the SEC can not impose the stamp of security on digital assets such as ETH Zurich. It always depends on the purpose of the coin or token, according to the SEC chairman:

"[...] whether a particular transaction involves the sale of a security, regardless of the terminology used to identify the digital asset, depends on the economic reality of the transaction."

More details about ICOs

Furthermore, Clayton provides more clarity in terms of ICOs. Referring to the Securities Act of 1933, the Chairman emphasized that "all instruments sold as investment qualify as security". This is the case when investors "have a reasonable expectation of a return".

Hinman Speech Confirmed

The background of the letter was a speech by William Hinman, chairman of the SEC Corporate Finance Department. The SEC employee had already given this in June 2018 at the Yahoo Finance All Markets Summit. According to the content of the speech, it was already clear to Hinman at that time that ETH was not considered security per se.

The news platform Coin Center had made inquiries in the course of this speech. It was wanted to clarify whether the Hinman statement was a one-on-one opinion or the official position of the agency.