The top 10 cryptocurrencies by market cap, including Bitcoin, were surging on Thursday, after the SEC said it would not classify bitcoin or ether as a security.
At about 2:25 pm Eastern, Bitcoin was up 5.54% in the past 24 hours to $6,696.83 with a market cap of $114.47 billion, Ethereum was up 10.06% with a market cap of $52.03 billion and Ripple was up 6.8% with a market cap of $22.02 billion.
“We don’t see a lot of value in seeing ether as a security,” William Hinman, head of the Division of Corporate Finance for the SEC, said at the Yahoo All Markets Summit: Crypto conference in San Francisco. “Ether is a coin that is evolving.”
Hinman added that when he looks at Bitcoin today, he doesn’t see a central third party whose efforts are key factor to determining the success of that enterprise.
“The network on which bitcoin functions is operational and appears to have been decentralized for some time,” Hinman said. “Moreover, putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network, its decentralized structure, we believe that current offers and sales of Ether are not securities transactions.”
Hinman cited the cryptocurrency’s decentralized and public network, and lack of a third party expecting to make a profit as reasons that the agency won’t treat it like a security, reports CNBC.
Yahoo Finance reports that Hinman said that the SEC will not be changing cryptocurrency and digital asset rules, but rather would be applying them. Previously, bitcoin and ether may have been offered as securities (like shares of a company), which would have required registration with the SEC, but a consensus has emerged that they behave and are treated like commodities, similar to gold and oil.
“We are glad the SEC agrees with our long held analysis of how securities law applies to decentralized cryptocurrency networks like bitcoin and Ethereum,” said Jerry Brito, executive director of Coin Center, a non-profit focused on issues facing cryptocurrencies in a statement.
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