Senior regulator with the US SEC states Ethereum not a security - markets respond with $17 billion market cap boost!

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While not an official ruling, this does provide an insight into the conversations regarding cryptocurrency going on behind closed doors of the US government.

Speaking at the All Markets Summit in San Francisco, an event presented by Yahoo, US Securities and Exchange Commission director of corporate finance William Hinman stated:

"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."

An important factor to consider - this quote was part of written prepared comments from Mr. Hinman - not an off the cuff remark or response to a question.  The fact this comment was prepared in advance leads me to believe we are likely hearing the same conclusions the SEC has come to internally.

Now here's the biggest part of this - the reason for Ethereum not meeting the standard of security is 'its decentralized structure' - meaning if this is how the SEC will make this determination, many other cryptocurrencies are also now in the clear.

But, he did elaborate with a warning for ICO's, saying:

"Even digital assets with utility that function solely as a means of exchange in a decentralized network could be packaged and sold as an investment strategy that can be a security."
So the rules seem pretty straightforward - talk about all the great things a coin can do, but do not tell people to buy it because it's going to go up in value - do not sell a coin as a for-profit investment.

Markets have responded today with green candles everywhere, and a market cap rise of $17 billion at the time of publishing.
Author: Ross Davis
E-Mail: Twitter:@RossFM
San Francisco News Desk

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