William Hinman, head of corporate finance at the US Securities and Exchange Commission (SEC), said at the Yahoo All Markets Summit in San Francisco: 'The key to deciding whether to sell a security is how to sell it, and Reasonable expectations of buyers. '
Hinman said that the main problem in deciding whether cryptocurrencies and ICOs belong to securities lies in the expected returns of third parties. Specifically, whether there is a person or organization sponsoring the creation and sale of assets and has played a part in the development and maintenance process. Important role. For buyers of assets, the key is whether they are seeking return on investment.
Hinman explained that if there is a centralized third party, and the buyer is expected to return, then it is likely to be a security. However, Hinman also gave some examples that encrypted assets will not be regarded as valuable Securities are not subject to supervision by the SEC. He specifically pointed out that Bitcoin is not a securities because it is decentralized and there are no key third parties. In addition, Ethereum is not a securities, because the Ethernet network is also decentralized.
Hinman did not explain whether the other cryptocurrencies belonged to securities, and in particular to the Swiss currency (XRP), which was becoming the target of the lawsuit. Ripper had said that he belonged to the securities.
With respect to the ICO, Hinman also admitted that some digital assets are structured more like consumer projects than securities, especially if these assets are purchased for personal use rather than for investment. He seems to imply that such investments (For example, investing in a book club or golf club member) is probably not a security.
Hinman defended the SEC's strict interpretation of securities law. He pointed out: 'People are excited about this new technology and have generated a lot of speculative interest. Unfortunately, there are also cases of fraud.'
Hinman admits that people may still have a lot of confusion about how to determine whether cryptocurrencies and ICOs belong to securities, and his office is willing to help. He said: 'We are always ready to provide more formal information on the correct description of digital assets and their uses.' Interpretation or guidance. '