• The recent release of the Hinman papers in the SEC’s case against Ripple is likely to benefit ether (ETH) and push for decentralization in the crypto market.
• According to a research report by JPMorgan (JPM), senior SEC officials did not classify ether as a security in 2018 and acknowledged an “other category” that could apply to decentralized tokens.
• JPMorgan suggests that these revelations could explain why the SEC has not targeted ether while targeting other crypto tokens this year, which could lead to new legislation relevant for ether.
SEC Documents Boost Ether
The release of the Hinman papers in the U.S. Securities and Exchange Commission’s (SEC) case against Ripple is expected to benefit Ether (ETH) and drive greater decentralization within the crypto market. A research report by JPMorgan (JPM) noted that senior SEC officials did not categorize ether as a security in 2018 and acknowledged an „other category“ for decentralized cryptocurrencies like ETH. This revelation may be why the SEC hasn’t taken action on Ether despite their actions on other cryptocurrency tokens this year, leading to potential new legislation relevant for ETH.
Potential Regulatory Shift
JPMorgan proposes placing Ether in the same category as Bitcoin (BTC), treating it as a commodity overseen by the Commodity Futures Trading Commission (CFTC). The bank also suggests introducing a new „other category“ specifically designed for decentralized cryptocurrencies like ETH, with level of decentralization determining whether or not it would be classified as a security under US securities laws. These efforts aim to streamline regulation surrounding Ethereum-based tokens more effectively than ever before.
Howey Test Clarification
The emails associated with former Director of Corporation Finance William Hinman’s 2018 speech suggested that Ethereum does not qualify as a security under US securities laws according to Howey Test criteria, due to its lack of control from any single governing body or group of people. The absence of such control was seen as contributory factor towards classifying ETH as „not a security.“ However, JPMorgan highlighted that there may need for some regulation surrounding Ethereum-based tokens even if they are not considered securities under law – though this may vary depending on individual cases and circumstances.
Implications For Future Regulation
The implications of this decision are expected to influence ongoing congressional efforts regarding cryptocurrency regulations, potentially preventing Ethereum from being classified as a security moving forward – but only time will tell what effects these changes will have on both current legislation and future opinion around digital assets more generally speaking.
Overall, while there are no guarantees about what effect these documents might have on existing or upcoming regulation concerning Ethereum-based tokens, it is clear that they represent an important milestone in terms of understanding how governments view digital currencies moving forward – something which should ultimately prove beneficial for both investors and developers alike given enough time passes between now and then..