The U.S. Securities and Exchange Commission (SEC) has expressed regret over the confusion caused by their previous classification of tokens as securities. This clarification came during a recent conference, where the SEC’s Division of Corporation Finance director, William Hinman, stated that Bitcoin and Ether are not securities, but rather commodities. He also mentioned that the context in which these tokens are sold can influence whether they’re classified as securities, which offers some relief to ICO projects.
In the past, the SEC’s stance on cryptocurrencies has been rather unclear, especially when it comes to Initial Coin Offerings (ICOs). This has been a significant source of concern for many digital currency projects, as the classification of tokens as securities could potentially bring them under strict regulatory control. However, Hinman’s recent statement may provide some clarity and reassurance, as it suggests that not all tokens will be considered securities.
Yet, it’s important to note that despite this clarification, there’s still some ambiguity over the precise classification of tokens. The SEC stressed that the economic reality of a transaction determines its nature, regardless of how it’s labeled. Therefore, the classification of tokens could still change depending on the circumstances. This ongoing uncertainty underscores the need for clear and consistent guidelines on crypto assets, for both investors and projects.
