Today has seen improvement across the board for the majority of cryptocurrencies following yesterday’s announcement by the SEC that Ethereum (ETH) will not be considered a security.
The past few weeks saw significant distress amongst various cryptocurrencies, particularly Ethereum and Ripple (XRP), over whether or not they are to be considered securities and what that means for the future of trading digital assets.
Ethereum, in particular, was under scrutiny for failing to register its Initial Coin Offering (ICO) with the SEC back in 2014 and risked being considered ‘noncompliant’. Bitcoin (BTC) has never seriously been considered at risk of such regulations since it was mined from inception and acts as a replacement for sovereign currencies.
Yesterday, the Securities Exchange Commission (SEC) Finance Director William Hinman made his position on the matter clear at Yahoo Finance’s All Market Summit in San Francisco:
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.”
Whether or not Ripple (XRP) is considered a security or not is still unclear. Continuing in his speech, Hinman went on to state that:
Central to determining whether a security is being sold is how it is being sold and the reasonable expectations of purchasers,”
A large part of the law hinges on the whether or not investors are looking for a return on their asset. Ripple is currently subject to a class action lawsuit claiming it is a security, the outcome of which remains to be seen.
Since the announcement the price of almost every cryptocurrency on the market has enjoyed positive upward movement, with some coins, including Ethereum, seeing as much as 10% gains. Ethereum has corrected slightly back to around $500 now but was as high as $518 earlier today.
Bitcoin (BTC) is up 5.89 percent trading at $6,623 at time of writing, down only slightly from $6,680 earlier this morning. Trading volumes have increased to $5.1 billion, a significant improvement from this weeks low of $3.8 billion.
The bullish trend follows comments yesterday by crypto’s own Dr Doom, Nouriel Roubini, who took shots at the crypto market while voicing his opinions on Twitter about venture capitalist and Bitcoin enthusiast Tim Draper:
Draper is indeed a lousy investor. After Theranos he became a crypto-evangelist… he will lose on his shitcoins even more than he lost in Theranos https://t.co/NczK9G0M8W
— Nouriel Roubini (@Nouriel) June 13, 2018
Image From Shutterstock