No Products in the Cart
Last week the rumor mill was clunking into action with the Wall Street Journal publishing an article about a hearing with the SEC regarding Ethereum and its status as a security.
The cryptocurrency market took nearly a $30 billion hit when the Wall Street Journal reported that the SEC is taking into consideration that Ethereum could fall under the Securities Act of 1933. The US Securities and Exchange Commission as well as Commodity Futures Exchange Commission are looking closely at Ethereum's token presale in 2014 and whether or not it should be classified as a security. The presale of ETH tokens initially raised 31,000 BTC to fund the development of Ethereum. The fact that investors likely bought the tokens in the hopes that their value would increase over time, raised questions amongst regulators. The hearing was set for May 7. Coinbase is already working on getting a license with the SEC. If Ethereum is deemed a security, the SEC may give a grace period. If not, worst case scenario is that Coinbase and other US exchanges would delist ETH for a bit. If confirmed a commodity, then nothing would change.
The problem with all of this news is that nobody knows if the WSJ is spilling the beans or simply spreading fear. Upon further examination of SEC's website, there are no traces of a meeting regarding Ethereum on their Upcoming Events page. Assuming that all of this alleged claptrap is true, the odds of the SEC making an immediate announcement is slim. Ethereum co-founder Joseph Lubin said he’s unconcerned about reports that the U.S. Securities and Exchange Commission is considering whether to name Ether a security. He said digital asset is used as a means to fuel applications based on Ethereum, not as an investment or stake in a company. Donnie Harinsut, co-founder of decentralized network for financial services OmiseGO, which sold $25 million of its OMG token in an initial coin offering last year, echoed Lubin’s statements. OMG “is not a cryptocurrency, it’s a token made to run on a network,’’ Harinsut said, noting that they’re a Bangkok-based company and Thailand officials have encouraged cryptocurrency projects. Still, Harinsut added OMG tokens may be affected by regulation elsewhere, “it’s a global network and they can be distributed everywhere.’’
Is the Wall Street Journal spreading FUD? Share this blog post and give us your thoughts.
Follow me on Twitter @EgressVoidLight