The cryptocurrency market just rebounded from the bad week, and rose from $271 billion to $284 billion in the past 24 hours, mostly following the news by the US Securities and Exchange Commission (SEC) clarifying that Bitcoin and Ethereum are not considered as securities under the law of US.
The Director at the Division of Corporation Finance at SEC, William Hinman, was the bearer of good news during the Yahoo Finance All Market Summit. At the event, he emphasized that Ether and Bitcoin are not securities as they do not benefit a single organization or a company.
Hinman also touched ground about Initial Coin Offerings (ICOs) of Ethereum in 2014, which led the investors present to become concerned about the regulatory aspects of Ether. However, he also added that despite its decentralized structure, Ethereum is currently eliminating the possibility of categorizing Ether as a security.
As Hinman explained:
“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,”
Right after Hinman’s speech was released, the price of Ether surged by 12% going from $464 to $524. This clarification by the SEC definitely gave Bitcoin and Ethereum some breathing room.
Still, nobody can go against the downward trend of the major cryptocurrencies in 2018. In just a few months, the total market cap lost hundreds of billions and the short-term stability was also pointed out by SEC as the key role in the mid-term price movement of both Bitcoin and Ethereum, as well as other cryptocurrencies.
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