The US Securities and Exchange Commission is mulling to include alt-coins and Initial Coin Offerings (ICOs) in the definition of securities. William Hinman, Head (Corporate Finance) and the key official at the US SEC is given the task to frame a policy on blockchain and bitcoin (BTC).
William Hinman will clarify the doubts about a new policy on digital currencies like bitcoin. He will also discuss the refusal of SEC to approve the bitcoin ETF at the Yahoo’s All Markets Summit that will be held on Thursday in San Francisco.
Is The Alt-Coins and Ripple (XRP), Ether (ETH) Securities?
The SEC is gearing to clear the confusion surrounding the classification of digital assets including Ripple, Ether and ICOs into securities. He will answer questions like “Is ICOs are the securities and if Yes, Is it necessary to register with the SEC”. He will also give answers to “Is the Alt-coins such as Ether and Ripple classified into Securities?”. All these issues together with the refusal of the Bitcoin ETF by the SEC are creating obstacles for the development of blockchain build-out and cryptocurrencies.
Chief Market Strategist at TD Ameritrade, JJ Kinahan said no one is aware of the exact rules. Therefore, a clarity is necessary on what is allowed and what is not to steer the markets in the right direction.
According to the speech given by Jay Clayton, Chairman (SEC) last week at the Sandler O’Neill Global Exchange conference, SEC is very clear about what the securities are. While speaking to CNBC, he said, the term security is used to evaluate the ICOs and crypto assets.
What is a security?
When a company is raising money from the public for an investment in a project with an expected return is called a security. Clayton is pretty clear that the definition of security will not be changed because of the development of new technologies.
A lot of debate is churning around the crypto assets and the SEC is not going to relax any rules based on that discussion. The SEC needs to know that the assets exist and their pricing is certain. They should as well function to offer rich dividends to the investors.
Pointman of SEC on ICOs and Cryptocurrencies
According to the pointman of SEC on Initial Coin Offerings and Cryptocurrencies, ICOs are considered as securities and will be regulated by the SEC as per the relevant security laws and Ether and Bitcoin is not considered as securities.