William Hinman, Head of the Division of Corporate Finance for the SEC, said in a speech at the Yahoo All Markets Summit: Crypto conference in San Francisco that bitcoin and ether are not securities.  However, he did establish that a majority of initial coin offerings (ICOs) are securities that should fall under the regulatory control of the SEC and its securities laws.

The determining factor that Hinman deemed as paramount to whether bitcoin is a security focuses on decentralization–the cryptocurrency lacks a central party whose efforts are a key factor in the enterprise.

Related: A Gloomy Forecast for Bitcoin

“Central to determining whether a security is being sold is how it is being sold and the reasonable expectations of purchasers,” said Hinman. “Over time, there may be other sufficiently decentralized networks and systems where regulating the tokens or coins that function on them as securities may not be required.”

Blockchain ETFs that focus on the underlying technology for cryptocurrencies shrugged off Hinman’s statements, such as Amplify Transformational Data Shrg ETF (NYSEArca: BLOK) and Reality Shares Nasdaq NexGen Economy ETF (NASDAQ: BLCN).  BLOK was up 0.62% and BLOK was up 0.42% an hour before the market close.

Bitcoin Prices Down Overall

Despite the latest statements by Hinman, prices of Bitcoin are down overall at about $6,600–almost 70% less than its high of almost $20,000 back in December.  Investors worried that the falling price could spill over into the stock market can feel at ease since its an isolated issue, according to Matt Maley, an equity strategist at institutional trading firm Miller Tabak.

“There are things to be concerned about in terms of the stock market here with emerging markets and other issues, but I don’t think bitcoin is going to be one of them,” said Maley. “Everybody was talking about both of those things when they were in their bubbles, but only in the tech stocks did they own it all.  Everybody seemed to own some tech stocks, whether it be the individual names or through their mutual funds. Today, while that bubble was forming in bitcoin, not very many people bought it at all.”

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