U.S. SEC says it won’t Change the Definition of a Security: Crypto Not A Security

1211
U.S. SEC says it won’t Change the Definition of a Security_ Crypto Not A Security
Advertisement1xbit    

The US Securities Exchange Commission is currently sourcing for innovative ways to manage the emerging multi-billion cryptocurrency industry.
That, however, does not include any plans to redefine the meaning of a security according to Jay Clayton, who heads the agency.
Speaking to CNBC on Wednesday,

“We are not going to do any violence to the traditional definition of security that has worked for a long time.
“We’ve been doing this (managing securities) for a long time. There’s no need to change the definition,” he said.

According to a 1946 Supreme Court case that now serves as a modern precedent, securities represent an investment of money in a common enterprise, in which the investor expects profits primarily from others’ efforts.
Whether this definition applies to cryptocurrencies as a digital asset, has been a debate with critics often pointing to the ability of crypto tokens to serve as a regular means of exchange.
They argue that the court ruling called the ‘’Howey Test’’ was made years ago and without cryptocurrencies in sight.
Going a step further, the rules guiding ICOs in the US will not be changed as Jay Clinton revealed in later comments,

“If you have an ICO or a stock, and you want to sell it in a private placement, follow the private placement rules. If you want to do any IPO with a token, come see us (SEC).”

Is It Time For a Review?

Ripple’s XRP has recently come under fire as an “unregistered security” and is currently the subject of a court case.
Ryan Coffey, who trades the token claims he lost $551.89 and demands Ripple Labs refund the sum of $300 million worth of XRP.
How this ongoing case plays out could eventually determine whether Ripple continues to exist as security and could go on to affect other tokens that follow the same model.
This decision will largely affect the crypto ecosystem in the US and is one that newly appointed SEC Senior Advisor for Digital Assets and Innovation, Valerie A. Szczepanik will tackle first in her new position.
Will a new definition of securities that cover cryptocurrencies be propounded?
Will the “Howey Test” continue to prevail in a new era?
Only time will tell!


Get Daily Crypto News On Facebook | Twitter | Telegram | Instagram


DISCLAIMER Read More

The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.