SAN FRANCISCO. At a recent event SEC Director William Hinman discusses why he does not think Ethereum and Bitcoin are Securities. The primary reason is there is no central person responsible for either, and thus not an entity that is issuing anything. In his own words:

This is a major step forward for the utility-based mentality of blockchain, and the future of technological innovation. If BTC and ETH were deemed securities, that would greatly stymie innovation on either platform. As both Ether and Bitcoin have been rather sluggish lately, this serves as a nice dose of optimism for the future of decentralized cryptographic ledgers.

With that said, Hinman (and the SEC's) position is that the status of a particular cryptocurrency, or token, or digital asset, is fluid, and can change. In other words, they reserve the right to come in at any point if they deem necessary. What entities managing said information packets (items, coins, tokens, etc), should take away from this meeting is that the more decentralized a currency is, and the less it seems to indicate a "promise of returns", the less likely it is to be construed as a security. 

*Not Financial or Legal Advice.

Joseph Voelbel designs learning curriculum and writes about money, systems, and meaning. Author of Pay Attention to Bitcoin (2024), a crash-course primer on sound money, Nineteen Stories (2017), an exploration of the unknown, and This Plant Will Grow (2026), a children's book about a plant that becomes a rainforest.