SEC Director Hinman remarks on digital assets categorisation

Published: 21 June 2018

William Hinman, SEC Director in the Division of Corporation Finance gave industry an updated SEC position on the classification of cryptoassets during a recent speech at the Yahoo Finance All Markets Summit.

He confirmed his view of the application of the Howey test to coin and token offerings and his view that both Bitcoin and Ether are not securities. He noted that the decentralised nature of Bitcoin in practice means that profits are not generated by the efforts of a third-party for the purposes of the Howey Test and that federal securities law disclosure regimes to the offer and resale of Bitcoin would add little value.  Similarly for Ether. Director Hinman also offers insight into the fact that an asset originally offered as a security could potentially move outside the definition of a security where there is no longer a central enterprise being invested in, or the asset is sold only to purchase a good or service available through the network.

If members have any questions, or would like to be added to the AIMA Digital Assets and Blockchain Circulation Group, please contact Oliver Robinson.