U.S. SEC has announced that cryptocurrency ether is not a security. As a consequence, prices of Ether have observed a phenomenal upward growth. US Government also freed certain Govt. transactions in the token from federal securities laws from liabilities. Ether is the second-largest cryptocurrency by market cap after bitcoin and is powered by a technology called Ethereum.
William Hinman, director of the SEC’s division of corporation finance, said in San Fran cisco that the commission will not classify ether or bitcoin as securities. Elaborating on his statement, he said based on an understanding of the Ether, along with its Ethereum network and its decentralized structure, current offers and sales of Ether is not a security for transactions.
He also stated that the definition of “security” would not change to include bitcoin or Ether in any case. Hinman’s announcement cleared the official position of the SEC. The name of the crypto is not vital but the way of its transaction, sales, promise, and behaviour is the prime deciding factor.
After continuing speculation during last month, the remarks as indicated herewith it is apprehended that U.S. regulators, make the subject to more blocked by more stringent rules than bitcoin. For example, if Ether is deemed a security, websites doing the transaction in the token will require licenses from federal Govt. The price of one ether which shoots up by 11 percent to $520.68 has fallen more than 60 percent since its peak on January 18. The price of bitcoin also seen growth by 5 percent to $6,699 after the comments made by U.S. Govt.
The impact of the comments may lower the obstruction amongst cryptocurrency and mainstream currency and the financial products based on either which may include futures contracts in spite of the comment that Ether is not a security. Chris Concannon, president and chief operating officer quoted during Global Markets Inc “This announcement clears the obstruction the future of Ether”.
Financial analysts across the world have upgraded their review on cryptocurrencies following last year’s meeting related to fixation of a price. And the type of surge in types of new coins. On scrutiny of online coin marketing, it was revealed that about 1,600 of different coins are existing in the crypto market. It is revealed that most of the sales of Ether coins are in securities which took place as a result of crowd sale held in 2014, the Financial Times reported.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]