The US Securities and Exchange Commission (SEC) recently gave some good news to the crypto world, putting some worries and fears at rest. In March 2018, the crypto market took a downturn after the SEC said it was looking closer into cryptocurrencies.
Bitcoin was above $10,000 at that time, but then sunk by 10% when the SEC announcement came. The worst was feared: Bitcoin regulation as a security. The word "exchange" carries the impression that they are SEC registered and are regulated market places, when they are not. Crypto markets using the term exchange can give investors the impression they are regulated or meet regulator standards as a national securities exchange.
The uncertain future caused doubt and fear in holders, with a big sell off following. All those worries were for not, as it turns out. William Hinman, Director, Division of Corporation Finance at SEC, says Bitcoin and Ethereum are not considered securities under US law. Native cryptocurrencies like Ethereum and Bitcoin don't benefit a single organization or company, and are not securities.
The crypto market rebounded for a short time, cling up $20 billion, from $271 to $291 billion.
But does that mean Steem will be safe? Steem was created by a company called Steemit Inc. Bitcoin and Ethereum will be safe from regulation as a security, but Steem might not be. I'm not sure. Steemit Inc does hold a large portion of the supply, so it would seem to benefit them greatly.
Hinman mentioned the worrisome initial coin offering (ICO) aspect of Ethereum. But despite the token sale of Ether, the decentralized structure and state of the network eliminate Ether being categorized as a security.
"And putting aside the fundraising that accompanied the creation of Ether, 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. And, as with Bitcoin, applying the disclosure regime of the federal securities laws to current transactions in Ether would seem to add little value."
Ether spiked up 12% after that announcement, but was corrected soon after as it fell back down to the slump that crypto is experiencing overall. The downtrend in crypto remains strong despite such good news from the SEC which allowed a brief respite and breather from the constant falling value in the market.
Crypto will grow despite it's recent slump. Coinbase is the largest cryptocurrency exchange and waller int he world, based in the US, which will likely be supporting Ethetreum ERC20 token stands in teh future. Bittrex is also based in the US, and is actively working with lawyers to list ERC20 tokens in compliance with local regulations.
Thank you for your time and attention. Peace.
References: Crypto Market Rebounds as SEC Clarifies Bitcoin and Ethereum are Not Securities | Bitcoin and ether are not securities, but some initial coin offerings... | Bitcoin and Ether Aren’t Securities, Says SEC Official
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